TABLE OF CONTENT

CHAPTER NO

TITLE
List of tables List of figures Abstract

PAGE NO

INTRODUCTION
1.1 About the project 1.2 About the Banking industry 1.3 About the company 1.4 Review of literature 1.5 Objectives of the study 1.6 Scope of the study
1.7 Limitations of the study

1.8 Research methodology 1.8.1 Research design 1.8.2 Methods of data collection 1.8.3 Research tools

DATA ANALYSIS AND INTERPRETATION

SUGGESTIONS AND CONCLUSION

3.1 Suggestions 3.2 Conclusions APPENDIX 1- References

CHAPTER 1 INTRODUCTION 1.1.ABOUT THE PROJECT:Financial Management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin.

Financial Management is concerned with the duties of the finance manager in a business firm. He performs such varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and funds procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance.

Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firms performance in order to make investment decisions, they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm.

Financial performance is an important aspect which influences the long term stability, profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been taken up for the study and was conducted at Madurai district central co operative bank. Analysis of Financial performances is of greater assistance in locating the weak spots at the financial position of Madurai district central co operative bank. This further helps in Financial forecasting and Planning Communicate the strength and financial standing of Madurai district central co operative bank For effective control of business

FINANCIAL STATEMENTS ANALYSIS:

Financial performance analysis is defined as the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. Financial Management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin. It is concerned with the duties of the finance manager in a business firm. He performs such varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and funds procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance. The financial statements provide some extremely useful information to the extent that the balance sheet mirrors the financial position on a particular date in terms of the structure of assets, liabilities and owners equity, and so on and the profit and loss account shows the results of operations during a certain period of time in terms of the revenues obtained and the cost incurred during the year. Thus, the financial statements provide a summarized view of the financial position and operations of a firm. Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firms performance in order to make investment decisions, they should be prepared very carefully and contain as much investment decisions, they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm. The focus of financial analysis is on key figures in the financial statements and the significant relationship that exists between them. The analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firms position and performance. The first task of the financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. The second step is to arrange the information in a way to highlight significant relationships. The final step is interpretation and drawing of inferences and conclusion. In brief, the financial analysis is the process of selection, relation and evaluation.

NEED FOR FINANCIAL PERFORMANCE ANALYSIS:

Financial statements are prepared to meet external reporting obligations and also for decision making purposes. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. This analysis also helps the firm to evaluate its standings in terms of the financial position.

Financial performance is an important aspect which influences the long term stability, profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been taken up for the study with MDCC as the project.

Analysis of Financial performances is of greater assistance in locating the weak spots at the MDCC even though the overall performance may be satisfactory. This further helps in Communicate the strength and financial standing of the MDCC. For effective control of business.

RATIO ANALYSIS:Ratio analysis is a powerful tool of financial analysis. A ratio is defined as The Indicated Quotient of Two Mathematical Expressions and as The Relationship between Two or More Things. In financial analysis, a ratio is used as a benchmark for evaluating the financial position and performance of firm. The absolute accounting figures reported in the financial statement do not provide a meaningful understanding of the performance and financial position of a firm. The relationship between two accounting figures, expressed mathematically is known as a financial ratio. Ratios help to summaries large quantities of financial data and to make qualitative about the firms financial performance. The point to note is that a ratio reflecting a quantitative relationship helps to form a qualitative judgment. Such is the nature of all financial ratios.

SIGNIFICANCE OF USING RATIOS:

The significance of a ratio can only truly be appreciated when: 1. It is compared with other ratios in the same set of financial statements. 2. It is compared with the same ratio in previous financial statements (trend analysis). It is compared with a standard of performance (industry average). Such a standard may be either the ratio which represents the typical performance of the trade or industry, or the ratio which represents the target set by management as desirable for the business.

TYPES OF RATIO:Liquidity Ratios:

The importance of adequate liquidity in the sense of the ability of a firm to meet current/short-term obligations when they become due for payment can hardly be overstresses. In fact, liquidity is a prerequisite for the very survival of a firm. The short-term creditors of the firm are interested in the short-term solvency or liquidity of a firm. The short-term creditors of the firm are interested in the short-term solvency or liquidity of a firm. But liquidity implies from the viewpoint of utilization of the funds of the firm, that funds are idle or they earn very little. A proper balance between the two contradictory requirements, that is, liquidity and profitability, is required for efficient financial management. The liquidity ratios measures the ability of a firm to meet its short-term obligations and reflect the short-term financial strength and solvency of a firm.

Activity Ratios:
Activity ratios are concerned with measuring the efficiency in asset management. These ratios are also called efficiency ratios or asset utilization ratios. The efficiency with which the assets are used would be reflected in the speed and rapidity with which assets are converted into sakes. The greater is the rte of turnover or conversion, the more efficient is the utilization of asses, other thongs being equal. For this reason, such ratios are designed as turnover ratios. Turnover is the primary mode for measuring the extent of efficient employment of assets by relating the assets to sales. An activity ratio may, therefore, be defined as a test of the relationship between sales and the various assets of a firm.

Financial Leverage (Gearing) Ratios:

The long-term lenders/creditors would be judge the soundness of a firm on the basis of the long-term financial strength measured in terms of its ability to pay the interest regularly as well as repay the installment of the principal on due dates or in one lump sum at the time of maturity. The long term solvency of a firm an be examined by using leverage or capital structure ratios. The leverage or capital structure ratios may be defined as financial ratios which throw light on the long-term solvency of a firm as reflected in its ability to assure the long-term lenders with regard to (i) periodic payment of interest during the period of the loan and (ii) repayment of principal on maturity or in predetermined installments at due dates.

Profitability Ratios:
The main object of a business concern is to earn profit. A company should earn profits to survive and to grow over a long period. The operating efficiency of a business concern is ultimately adjudged by the profits earned by it. Profitability should distinguish from profits. Profits refer to the absolute quantum of profit, whereas profitability refers to the ability to earn profits. In other words, an ability to earn the maximum from the maximum use of available resources by the business concern is known as profitability. Profitability reflects the final result of a business operation. Profitability ratios are employed by the management in order to assess how efficiently they carry on business operations. Profitability is the main base for liquidity as well as solvency. Creditors, banks and financial institutions are interest obligations and regular and improved profits enhance the long term solvency position of the business.

Comparative Balance sheet:

Comparative balance sheets as on two or more different dates can be used for comparing assets, liabilities, capital and finding out any increase or decrease in those items. comparative balance sheet analysis is the study of the trend of the same item s, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. Such analysis often yields valuable information as regards progress of business concern. While the single balance sheet represent balances of accounts drawn at the end of an accounting period, the comparative balance sheet represent not nearly the balance of accounts drawn on two different dates, but also the extent of their increase or decrease between these two dates.

1.2: ABOUT THE BANKING INDUSTRY:Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters forgetting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial &Banking Sector Reforms after 1991.

BANKING SERVICES:
With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks operating in India. With stiff competition and advancement of technology, the service provided by banks has become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from accounts or a cheque from north of the country being cleared in one month in the south.

BANKS IN INDIA:
In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players. All these details and many more are discussed over here. The banks and its relation with the customers, their mode of operation, the names of banks under different groups and other such useful information are talked about. One more section has been taken note of is the upcoming foreign banks in India.

The RBI has shown certain interest to involve more of foreign banks than the existing one recently. This step has paved a way for few more foreign banks to start business in India. Major Banks in India are:

ABN-AMRO Bank, Andhra Bank, Allahabad Bank. Bank of Baroda, Bank of India, Bank of Maharashtra, Bank of Punjab. Canada Bank. Catholic Syrian Bank, Central Bank of India, Citi Bank, City Union Bank, Corporation Bank. Dena Bank, Dhanalakshmi Bank, Federal Bank, HDFC Bank, HSBC, ICICI Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, IndusInd Bank, ING Vysya Bank.

Jammu & Kashmir Bank. JPMorgan Chase Bank, Karnataka Bank, Karur Vysya Bank, Lakshmi Vilas Bank, Oriental Bank of Commerce, Punjab National Bank. Scotia Bank, South Indian Bank, State Bank of India (SBI), State Bank of Bikaner & jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Travancore, Syndicate Bank.

UCO Bank , United Western Bank ,UTI Bank,Vijaya Bank.

CLASSIFICATION OF BANKS:
SAVINGS BANKS: These banks function with the intention to culminate saving habits among people, especially those who belong to low income groups or those who are salaried. The money these people deposit in the banks are invested in securities, bonds etc. These days, many commercial banks perform the dual functions of savings bank. The postal department is also in a way a saving bank.

COMMERCIAL BANKS: These banks function to help the entrepreneurs and businesses. They give financial services to these businessmen like debit cards, banks accounts, short term deposits, etc. with the money people deposit in such banks. They also lend money to businessmen in the form of overdrafts, credit cards, secured loans, unsecured loans and mortgage loans to businessmen. The commercial banks in the country were nationalized in 1969. So the various policies regarding the loans, rates of interest and loans etc are controlled by the Reserve Bank. These days, the commercialized banks provide some services given by investment banks to their clients. The commercial banks can be further classifies as: public sector bank, private sector banks, foreign banks and regional banks. 1. The public sector banks are owned and operated by the government, who has a major share in them. The major focus of these banks is to serve the people rather earn profits. Some examples of these banks include State Bank of India, Punjab National Bank, Bank of Maharashtra, etc. 2. The private sector banks are owned and operated by private institutes. They are free to operate and are controlled by market forces. A greater share is held by private players and not the government. For example, Axis Bank, Kotak Mahindra Bank etc.

3. The foreign banks are those that are based in a foreign country but have several branches in India. Some examples of these banks include; HSBC, Standard Chartered Bank etc.

4. The regional rural banks were brought into operation with the objective of providing credit to the rural and agricultural regions and were brought into effect in 1975 by RRB Act. These banks are restricted to operate only in the areas specified by government of India. These banks are owned by State Government and a sponsor bank. This sponsorship was to be done by a nationalized bank and a State Cooperative bank. Prathama Bank is one such example, which is located in Moradabad in U.P.

COOPERATIVE BANKS:
These banks are controlled, owned, managed and operated by cooperative societies and came into existence under the Cooperative Societies Act in 1912. these banks are located in the urban as well in the rural areas. Although these banks have the same functions as the commercial banks, they provide finance to farmers, salaried people, small scale industries, etc. and their rates of interest of interest are lower as compared to other banks. There are three types of cooperative banks in India, namely: 1. Primary credit societies : These are formed in small locality like a small town or a village. The members using this bank usually know each other and the chance of committing fraud is minimal. 2. Central cooperative banks: These banks have their members who belong to the same district. They function as other commercial banks and provide loans to their members. They act as a link between the state cooperative banks and the primary credit societies. 3. State cooperative banks : These banks have a presence in all the states of the country and have their presence throughout the state.

INVESTMENT BANKS:
These are financial institutions that provide financial and advisory assistance to their customers. Their clients can be individuals, businesses, or government organizations. They assist their customers to raise funds when required. These banks act as the underwriters for their customers when they want to raise capital by issuing securities. In some cases, they also help their customers to issue securities.

When there is a merger or an acquisition, they provide their customers with the necessary support like marketing, foreign trading, foreign exchange, sale of equities, fixed income instruments etc. Apart from raising capital, these banks render valuable financial advice to their customers and various kinds of businesses. Some examples of these banks include, Bank of America, Barclays Capital, Citi Bank, Deutsche Bank etc. SPECIALIZED BANKS: These provide unique services to their customers. Some such banks include, foreign exchange banks, development banks, industrial banks, export import banks etc. These banks also provide huge financial support to businesses and various kinds projects and traders who have to import or export their goods or services.

CENTRAL BANK: The central bank is also called the banker's bank in any country. In India, the Reserve Bank of India is the central bank. The Federal Reserve in USA and the Bank of England in UK function as the central bank. This bank makes various monetary policies, decides the rates of interest, controlling the other banks in the country, manages the foreign exchange rate and the gold reserves and also issues paper currency in a country. The monetary control is the primary function of a central bank in most countries and so they are considered as the lender of last resort to various commercial banks.

INTRODUCTION TO CO OPERATIVE BANK:

A Co-operative bank, as its name indicates is an institution consisting of a number of individuals who join together to pool their surplus savings for the purpose of eliminating the profits of the bankers or money lenders with a view to distributing the same amongst the depositors and borrowers.

Co-operative bank, in a nutshell, provides financial assistance to the people with small means to protect them from the debt trap of the moneylenders. It is a part of vast and powerful structure of co-operative institutions which are engaged in tasks of production, processing, marketing, distribution, servicing and banking in India. A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. These banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts). Co-operative banks differ from stockholder banks by their organization, their goals, their Values and their governance.

The Co-operative Banking System in India is characterized by a relatively comprehensive network to the grass root level. This sector mainly focuses on the local population and micro- banking among middle and low income strata of the society. These banks operate mainly for the benefit of rural areas, particularly the agricultural sector.

ROLE OF CO-OPERATIVE BANKING IN INDIA:

Co-operative Banks are much more important in India than anywhere else in the world. The distinctive character of this bank is service at a lower cost and service without exploitation. It has gained its importance by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate. Co-operative banks role in rural financing continues to be important day by day, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of primary co-operative banks.

In rural areas, as far as the agricultural and related activities are concerned, the supply of credit was inadequate, and money lenders would exploit the poor people in rural areas providing them loans at higher rates. So, Co-operative banks mobilize deposits and purvey agricultural and rural credit with a wider outreach and provide institutional credit to the farmers. Co-operative bank have also been an important instrument for various development schemes, particularly subsidy-based programmes for poor. The Co-operative banks in rural areas mainly finance agricultural based activities like: Farming Cattle Milk Hatchery Personal finance

The Co-operative banks in urban areas finance in activities like: Self-employment Industries Small scale units Home finance Consumer finance Some of the forward looking Co-operative banks have developed sufficient core competencies to such an extent that they are able to challenge state and private sector banks

1.3: ABOUT THE COMPANY:M.D.C.C Bank is very popular bank among all co operative concerns in Madurai district. It extends it branches to the last edge of the Madurai district.

HISTORY OF THE BANK:

Name of the bank

The

Madurai

city co-

operative bank ltd.,

Date of starting Address

09.07.1912 187,North veli street, Madurai-625001.

Area of operation Authorized share capital No of members Audit classification

Madurai corporation limit Rs 13,340/68 A class

Total branches in Madurai district central co operative bank is 40 branches. Then it combined of Theni and Madurai.

The bank was started by 68 individuals and 105 societies contributing to the paid up share capital.The srivilliputhur banking union limited with jurisdictions over the taluks and srivilliputhur in Ramnad district was formed on 31-07-1920.the societies in these two taluks with assets and liabilities were transferred to the new banking union.

A separate central co operative bank for Ramnad district was founded on 28-111949.srivilliputhur banking union has several branches in Ramnad district. The name of srivilliputhur banking union is Ramanathapuram district central co operative bank limited.A separate central co-operative at Dindigul district was also started on 01-06-1991.

BRANCHES; There are two types of branches in M.D.C.C Bank. Madurai District Branches Theni District Branches

Madurai District Branches; Alanganallur, Anna Nagar, Arasaradi, Elumalai, Kalli Kudi, K.K Nagar Kottampatti,MaduraiEast,Meluer,NagamalaiPuthuKottai,N.C.SMills,Othakadai,Palanganatm, PandiyarajaPuram,K.Pudhur,Sathamangalam,Sellur,Solvanthan,T.Kallupatti,Tallakulam,Thir umangalam,Thirunagar,T.T.SBranch,Usilampati,Vadipatti,Villapuram,Peraiyur.Aavin,Krishn apuram Colony.

Theni District Branches; Aundipatti,Allinagaram,Bodinaikanur,Chinnnamanur,Cumbam,Theni,Periyakulam, Uthamapalayam.

ORGANISATION STRUCTURE

SPECIAL OFFICER

GENERAL MANAGER

MANAGER

TREASURER

OFFICE ASSISTANTS

Organization structure

DEPARTMENTS
The bank has the following departments;

DEPARTMENTS

HR DEPARTMEN T

FINANCE DEPARTMENT

MARKETING DEPARTMENT DE

RECRUITMENT

TRAINING

CUSTOMER SERVICE

PRODUCTS AND SERVICES;

The product and Services offered by MDCC BANK LTD includes;

DEPOSITS:
The Bank is accepting all types of deposits such as Saving bank a/c, Fixed deposit, Recurring deposit etc. The total deposit outstanding as on 31.3.2012 has been Rs16, 340.80 lakhs. The deposits are covered under deposits insurance scheme.
Saving Account Current Account Fixed Account Recurring Deposit Account Cash Certificate

SERVICES:
Clearing Safe Deposit Locker Demand draft/Pay order

LOANS:
The Bank has advanced to various types of loan such as jewel loan, mortgage loan, educational loan, personal loan, Housing loan and self-help group loan.

PROCEDURE:
The bank will be getting the personal details from the customer in an application form based on the loan. They will be getting the collateral security or an surety based on different loans. The bank will be verifying these securities by sending people and conform them. The bank will be charging interest rate which will differ as per RBI norms. Personal Loans, Mortgage Loan Gyan Sagar Educational Loans. Women Entrepreneur Development Scheme Home Loan, Micro Finance Vehicle Loans, Industrial Loan.

1.4: REVIEW OF LITERATURE:1. Dr.A.Abraham, (2004): Measurement of financial performance by ratio analysis helps identify organisational strengths and weaknesses by detecting financial anomalies and focusing attention on issues of organisational importance. Given that the mission of a nonprofit organisation is the reason its existence, it is appropriate to focus on financial resources in their relationship to mission. 2. Dr. Amal Yassin Almajali. (2012): This study aimed at investigating the factors that mostly affect financial performance of Jordanian Insurance Companies. The study population consisted of all insurance companies enlisted at Amman stock Exchange during the period (2002-2007) which count (25)insurance company. The data collected was analysed by using a number of basic statistical techniques such as T-test and Multiple- regression. The results showed that the following variables (Leverage, liquidity, Size, Management competence index) have a positive statistical researcher recommended that a high consideration of increasing the company assets will lead to a good financial performance and there is a significant need to have highly qualified employees in the top managerial staff.

3. Akram Alkhatib (2012): The purpose of this study is to empirically examine the financial performance of five Palestinian commercial banks listed on Palestine securities exchange (PEX). In this paper, Financial performance has been measured by using three indicators; Internalbased performance measured by Return on Assets, Market-based performance measured by Tobins Q model (Price / Book value of Equity) and Economicbased performance measured by Economic Value add. The study employed the correlation and multiple regression analysis of annual time series data from 2005-2010 to capture the impact of bank size, credit risk, operational efficiency and asset management on financial performance measured by the three indicators, and to create a good-fit regression model to predict the future financial performance of these banks. The study rejected the hypothesis claiming that there exist statistically insignificant impact of bank size, credit risk, operational efficiency and asset management on financial performance of Palestinian commercial banks.

4. Puwanenthiren Pratheepkanth, (2011): Capital structure is most significant discipline of companys operations. This researcher constitutes an attempt to identify the impact between Capital Structure and Companies Performance, taking into consideration the level of Companies Financial Performance.The analyze has been made the capital structure and its impact on Financial Performance capacity during 2005 to 2009 (05 years) financial year of Business companies in Sri Lanka. The results shown the relationship between the capital structure and financial performance is negative association at -0.114. Co-efficient of determination is 0.013. F and t values are 0.366, -0.605 respectively. It is reflect the insignificant level of the Business Companies in Sri Lanka. Hence Business companies mostly depend on the debt capital. Therefore, they have to pay interest expenses much. 5. Mabwe Kumbirai and Robert Webb (2010): This paper investigates the performance of South Africas commercial banking sector for the period 2005- 2009. Financial ratios are employed to measure the profitability, liquidity and credit quality performance of five large South African based commercial banks. The study found that overall bank performance increased considerably in the first two years of the analysis. A significant change in trend is noticed at the onset of the global financial crisis in 2007, reaching its peak during 2008-2009. This resulted in falling profitability, low liquidity and deteriorating credit quality in the South African Banking sector. 6. Tze San Ong,Cia Ling Teo (2011): The objective of this paper is to find out whether the local banks have achieved performance efficiency during the post merger period namely in the areas of profitability, cost savings, liquidity, shareholders wealth and solvency. Basically, three methods was employed to compare pre-post merger performance, First, comparison and analysis of ratios are used to compare the performance of local banks during the pre-merger period (1999-2001) and postmerger period (2002-2010). Second, paired sample t-test determines the significance differences in financial performance before and after the merger activity and third, Data Envelopment Analysis (DEA) approach measure the improvement in banks efficiency after the merger.

7. Dr Ahmed Arif Almazari (2012): This study attempts basically to measure the financial performance of the Jordanian Arab commercial bank for the period 20002009 by using the DuPont system of financial analysis which is based on analysis of return on equity model. The return on equity model disaggregates performance into three components: net profit margin, total asset turnover, and the equity multiplier. Arab bank is one of the largest financial institutions in the Middle East and is ranked amongst the largest international financial institutions. The bank witnessed a continuation of challenges brought on by the global financial crisis. It was found that the financial performance of Arab Bank is relatively steady and reflects minimal volatility in the return on equity. Net profit margin and total asset turnover exhibit relative stability for the period from 2001 to 2009.The equity multiplier also show almost stable indicators for the period from2001-2005 and the ratios declined from 2006-2009 which indicates that the Arab bank had less financial leverage in the recent years, which means the bank is relying less on debt to finance its assets. 8. Maryam MOHAMMADI(2012): Accounting principles are useful tools in executing and improving a successful practice management plan. In todays competitive environment, evaluating the financial performance is crucial for companies in manufacturing sector. The analysis of financial performance reflects the financial position of the company, the level of the competitiveness in the same sector, and a thorough knowledge about the cost and profit centres within the firm. Managers, investors, and creditors can then apply this accounting information provided by financial analysis in their strategic planning and investment decisions. This study investigates the financial performance of an investment company in Malaysia for a three-year period from 2009 to 2011, which is assessed using financial ratios. The findings pointed out that overall company performance reduced remarkably in the last year of the analysis. This study principally emphasizes on how accounting information aids budgetary decision-makers to evaluate the company financial performance, determine its future obligations, and make better investment decisions.

9. Md. Tofael Hossain Majumder(2011): The Pharmaceutical industry plays a vital role in the socio-economic development of Bangladesh. But the net profit of this industry has decreased for the last few years. This study is designed to review the financial performance of this industry, to test its strengths and weaknesses. The financial performance of this industry is measured in terms of Ratio (Profitability, Liquidity, Solvency and Activity ratio) Analysis and in terms of Testing Financial Soundness by using Multivariate Discriminate Analysis (MDA) as developed by Prof. Altman. For the source of data mainly relied on Annual Reports and official records. It was observed from the study of the financial statement of the Pharmaceutical industry that the profit earning capacity, liquidity position, financial position and the performance of the most of the Pharmaceuticals are not in sound position and it was also observed that the most of the Pharmaceuticals has a lower level position of bankruptcy. The reasons behind this position of the industry are inefficiency of financial management, absence of realistic goals, strict government regulation and increased cost of rawmaterials, labour and overhead. The financial performance should be improved immediately. Therefore, the appropriate authority should take measures for the removal of the above problems. 10. V Radha Naga Sai and Dr. Syed Tabassum Sultana (2013): The current paper evaluates the performance of the selected two banks based on the financial ratios from the perspective of pre and post merger. To analyze the impact of merger paired t-test was applied to the various financial ratios for before and after merger data. Based on the analysis of Indian overseas bank data, it can be concluded that Net profit margin, Operating profit margin, Return on capital employed, Return on equity and Debt Equity ratio there is significant difference but no significant difference with respect to Gross profit margin. Based on the analysis of HDFC bank data it can be concluded that Net profit margin, Operating profit margin, Return on capital employed, Return on equity and DebtEquity ratio there is no significant difference in these ratios before after merger. But significant difference with respect to Gross profit margin.

1.5: OBJECTIVES OF THE STUDY:Primary Objective:

To evaluate the financial efficiency of MADURAI DISTRICT CENTRAL CITY CO-OPERATIVE BANK LTD.,

Secondary Objectives:
i. ii. iii. iv. To analyze the liquidity solvency position of the bank. To understand the profitability position of the bank. To assess the factors influencing the financial performance of the organization. To understand the overall financial position of the bank.

1.6: SCOPE OF THE STUDY:1. This study will be useful for the bank to find out its financial position. 2. It also brings out the fact that whether the financial performance of the bank is progressive or regressive.

1.7: LIMITATONS OF THE STUDY:

1. The data have been tabulated using last five years annual report and such data are secondary in nature. 2. It has not been possible to get a personal interview with the top management employees of MDCCB. 3. Time was a limiting factor in conducting the study. 4. The study was completely done on the basis of ratios calculated from the balance sheets.

1.8: RESEARCH METHODOLOGY:Research connotes a systematic and objective investigation of a subject or problem in order to discover relevant information or principles. The success of a research depends mostly on the method on which it is carried out. The applied method will improve the validity of finding. This chapter discusses the method of data collection. RESEARCH It is defined as A systematic gathering, recording and analyzing of datas about problems relating to marketing of goods and services. It enables the companies to understand the needs and wants of the customers and also helps them in making decisions.

PERIOD OF STUDY:The period of study for this project is from Feb 2013 to June 2013.

1.8.1: RESEARCH DEIGN:The kind of research design used in this study is Exploratory Research. Exploratory research is conducted to clarify ambiguous problems. Management may have discovered general problems, but research is needed to gain better understanding of the dimensions of the problems. Exploratory studies provide information to use in analyzing a situation, but uncovering conclusive evidence to determine a particular course of action is not the purpose of exploratory research. Usually, exploratory research is conducted with the expectation that subsequent research will be required to provide conclusive evidence.

1.8.2: METHODS OF DATA COLLECTION:-

Primary data:Primary data is the first hand information that is collected during the period of research. Primary data has been collected through discussions held with the staffs & Some types of information were gathered through oral conversations with the cashier, taxation officer etc.

Secondary data:Secondary data studies whole records and banks balance sheet in which the project work has been done. In addition, a number of reference books, journals and reports were also used to formulate the theoretical model for the study. And some information were also drawn from the website.

1.8.3: TOOL USED FOR ANALYSIS:The project evaluates the financial performance one of the company with help of the most appropriate tool of financial analysis like ratio analysis.The data collected from the annual reports of the bank were subjected to analysis using tool relevantly. The tool used in this study is Ratio Analysis

PERIOD OF STUDY
The study was conducted for a period of five years from the year financial year

2008-2009 to 2011-2012.

APPENDIX 1-REFERENCE
1. Dr.A.Abraham, (2004), A Model of Financial Performance Analysis Adapted for NonprofitOrganizations, http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1320&context=commpapers. 2. Dr. Amal Yassin Almajali (2012), Factors Affecting the Financial Performance of Jordanian Insurance Companies Listed at Amman Stock Exchange Journal of Management Research Vol. 4, No. 2 pg no-266 to 269. 3. Akram Alkhatib (2012) Financial Performance of Palestinian Commercial Banks International Journal of Business and Social Science, Vol. 3 No. 3 Pg no175-184. 4. Puwanenthiren Pratheepkanth, (2011) Capital structure and financial performance evidence from selected business companies in Colombo stock exchange of srilanka Journal of Arts, Science & Commerce,Vol. II, Issue 2 Pg no 171-183. 5. Mabwe Kumbirai and Robert Webb (2010), A financial Ratio Analysis of Commercial Bank Performance in South Africa, African Review of Economics and Finance Vol. 2, No. 1, Pg no 35-50. 6. Tze San Ong,Cia Ling Teo (2011), Analysis On Financial Performance And Efficiency Changes Of Malaysian Commercial Banks After Mergers And Acquisitions, International Journal of Business and Management Tomorrow Vol. 1, No. 2, Pg no 1-16. 7. Dr Ahmed Arif Almazari (2012):Financial Performance Analysis of the Jordanian Arab Bank by Using the DuPont System of Financial Analysis, International Journal of Economics and Finance Vol. 4, No. 4 Pg no 87-94. 8. Maryam MOHAMMADI(2012): An Empirical study of financial performance evaluation of a malyasian manufacturing company Academica Science Journal V0l 1 No 1 Pg no 95-102. 9. Md. Tofael Hossain Majumder(2011): Financial Analysis of Selected Pharmaceutical Companies in Bangladesh, Journal of Biology, Agriculture and Healthcare Vol 1, No.2, 2011 Pg no 25-32 10. V Radha Naga Sai and Dr. Syed Tabassum Sultana(2013): A Financial performance analysis in banking sector International Monthly Refereed Journal of Research In Management & Technology Vol II, No-3 Pg no 56-66. in