A CASE STUDY
ON
PROFITABILITY ANALYSIS OF
MUKTINATH BIAKSH BANK
A Project work Report
Submitted By: Samjhana Upadhyay
TU Registration No: 7-2-920-348-2019
Symbol No: 709200191
Group: Finance
Danfe College, Kathmandu
Submitted to:
The Faculty of Management
Tribhuvan University
Kritipur
In partial fulfillment of the requirements for the degree of
BACHELOR OF BUSINESS STUDIES (BBS)
Putalisadak, Kathmandu
July, 2024
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ENDORSEMENT
We hereby endorse the project work report entitled “PROFITABILTY ANALYSIS OF
MUKTINATH BIKAS BANK” submitted by Samjhana Upadhyay of DANFE COLLEGE,
PUTALISADAK KATHMANDU, in partial fulfillment of the requirements for award of the
Bachelor of Business Studies (BBS) for external evaluation.
Signature: Signature:
Mr. Bishnu Sharma Mr. Krishna Prasad Poudel
(Head of Research Department) (Campus Chief)
Danfe College Danfe College
Date: July 2024 Date: July 2024
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TABLE OF CONTENTS
Titles Page No.
Title page i
Declaration ii
Supervisor’s Recommendation iii
Endorsement iv
Acknowledgement v
Table of Contents vi
List of Tables vii
List of Figures viii
Abbreviations ix
CHAPTER 1: INTRODUCTION
1.1 Background of the Study 1
1.2 Profile of Organization 2
1.3 Statement of Problem 4
1.4 Objective of the Study 4
1.5 Rationale of the Study 4
1.6 Review of literature 5
1.7 Research and methodology 6
1.8 Organization Study 9
1.9 Limitation of Study 10
CHAPTER 2: RESULTS AND ANALYSIS
2.1 Result and Analysis 11
2.2 Ratio Analysis 11
2.3 Findings 18
CHAPTER 3: SUMMARY AND CONCLUSION
3.1 Summary 20
3.2 Conclusion 20
BIBLIOGRAPHY
APPENDICES
vi
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Table No.:2.1
Net Profit/Revenue
Fiscal Year Net Profit Total Revenue Ratio (%)
2078/79 11341805287 3832644373 35
2077/78 1156256498 3789853140 30.51
2076/77 707405117 2788167391 25.04
2075/76 856166479 2518031091 34
2074/75 624033456 1727369011 36.13
Average 32.136
SD 8.98
CV 13.504
Source: Annual Report of Muktinath Bikas Bank
Figure 2.1:
Graphical presentation of Net profit to Revenue
Net Profit
40
35
30
25
20
15
10
0
2078/79 2077/78 2076/77 2075/76 2074/75
net profit ratio
The above table 2.1 and figure 2.1 shows the net profit margin of Muktinath Bikas Bank Ltd.
The analysis of figure shows that there is high fluctuation on net profit margin of Muktinath
Bikas bank. The average net profit margin of Muktintah Bikas Bank is 32.136% and its C.V
is 13.504% which indicates that Muktinath Bikas Bank Net Profit Margin fluctuates
by13.504%during five year periods.
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The figure and the table shows the initial increasing trend (2077/78) on the return on
shareholders’ equity this is due to increase in shareholder’s fund but not increase on proportion
of earning on that proportion. The company has been able to use its fund properly and able to
generate the sizeable incomes but while comparing and going into the hands of investment the
ratio seems to be increased in current year.
2.2.4 PE ratio:
Price to Earnings Ratio or Price to Earnings Multiple is the ratio of share price of a stock to its
earnings per share (EPS). PE ratio is one of the most popular valuation metric of stocks. It
provides indication whether a stock at its current market price is expensive or cheap.
Table no 2.4:
PE ratio: EPS / MPPS
Fiscal Year Price per share Market price P/E Ratio
2078/79 23.72 439.90 18.55
2077/78 24.03 657 27.34
2076/77 16.56 312 18.84
2075/76 27.94 370 13.24
2074/75 20.45 378 18.78
Average 19.35
Source: Annual financial statement of Muktinath Bikas Bank limited
Figure 2.4:
Graphical representation of Price Earnings Ratio
PE ratio
30
25
20
15
10
0
2078/79 2077/78 2076/77 2075/76 2074/75
pe ratio
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Return on assets seems to be lower, so systematic management system should be developed
for managing assets of company. Different types of plan should be made to fully the utilize
available assets so that we can get maximum profit from assets.
Muktinath Bikas Bank is maintaining its return on equity shareholder’s ratio quite well and
it recommended to keep up.
Bank shouldn't invest too much in the fixed assets because it yields only a nominal portion,
almost no yield.
The bank has successful in winning the trust of the customer, as volume of expenses is no
more difference and its growing. There is general rise and fall in expenses level during
different years. It should give basic priority to the customers and personnel first and then
organization objectives, which will help to develop effective value chain in the
organization.
Branches existing in some limited areas will not enable a bank to boost up its campaign of
deposits mobilization and credit disbursement as desired. Therefore, Muktinath Bikas Bank
is recommended to open many other branches.
Besides these, all the other functions of the company are satisfactory, no comments upon
it.
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BIBLIOGRAPHY
Bhandari, U. and Poudel, R. (2016). Business Research Methods, Kathmandu: Sukunda Pustak
Bhawan.
Poudyal, S., Pradhan S, G.M. Parajuli, D. (2015). Business studies –I, Kathmandu: Asmita
Publication.
Shrestha, P. (2017). Entrepreneurship and enterprise development, Kathmandu: Samjhana
publication.
Almumani, (2014). “Profitability analysis of Muktinath Bikas Bank- A Case Study of Erbil
Bank for Investment and Finance “, European Journal of Accounting Auditing and
Finance Research, Volume 2, pp162-177
Pradhan, S. (2000). Basics of Financial Management, Kathmandu: Educational Enterprise.
Chandra, P. (1993). Financial Management, Theory and Practice. New Delhi: Tata McGraw-
Hill Publishing Company Limited.
Rose, Stephen, A., Randolph, W. and Jorden, B.D. (2000). Fundamentals of Corporate
Finance. Boston: Irwin McGraw Hill.
Thapa, K., (2004). Corporate Financial Management. Kathmandu: Khanal Books Publishers.
Saphiro, A. C. (2003). Modern Corporate Finance. Delhi: Pearson Education (Singapore) Pte.
Ltd., India Branch.
Hague, I. (2011). “Comparative Study between Public Sector Banks & Private Sector Banks”,
International Journal of Management & Innovation.
Samad, A. (2004). Bahrain Development Bank’s Performance during 1994-2001. Credit and
Financial Management Review 10(1) pp. 33-40.
Other References:
Muktinath Bikas Bank. (2021). Annual Report for the year 2077/78 to 2078/79.
Nepal Rastra Bank. (n.d.). Home. Retrieved June 25, 2024, from https://www.nrb.org.np
Muktinath Bikas Bank. (n.d.). Home. Retrieved June 26, 2024, from
https://www.muktinathbikasbank.com
