FINANCIAL POSITION OF THE IDBI FEDERAL LIFE INSURANCE

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1 ISSN (Print): FINANCIAL POSITION OF THE IDBI FEDERAL LIFE INSURANCE Muthulakshmi.M Final year MBA Department of Management studies Periyar Maniammai University Vallam, Thanjavur. P.Nancy Prabha Assistant Professor Department of Management studies Periyar Maniammai University Vallam, Thanjavur. ABSTRACT-This paper focuses on analyzing the financial position of the IDBI federal life insurance. The objectives of this paper are to compare the performance of the past three financial years and to identify the changes in the financial position of the company. The secondary data used for this paper were collected from company records and the data were analyzed using comparative balance sheet and ratio analysis. Keywords: financial position, performance, IDBI federal life insurance. I.INTRODUCTION Financial position is the overall performance of the company. It is evaluate the company s growth. It derives by the usage of financial techniques. It affects the firm earnings and risk. And it is interested in any aspects of financial analysis. analysis is useful for interpret the IDBI federal life insurance. It improves the financial strength and weakness of the firm. Financial position is analyzing the level of the company II.REVIEW OF LITERATURE Neelaveni (212) explains how to evaluate the performance of insurance company at the time period of in the annual report. The public sector of insurance company was lagging due to the competition of private sector had well performed in financial aspects. Kumara (213) found that the financial performance of insurance industry has various parameters. It was observed by calculating the financial ratios. There has been a significant increase in the overall business performance of insurance industry. III.RESEARCH METHODOLOGY Objectives: To assessing the past3 years performance of IDBI federal life insurance. To understand the changes in financial position of the IDBI federal life insurance. IV.RESEARCH DESIGN For this paper to analyse the financial position to using ratio analysis,comparative balance sheet. V.DATA ANALYSIS AND INTERPRETATION They are useful for understanding financial position of the company. 1.1 RATIO ANALYSIS The current ratio is a liquidity ratio that measures the company ability to pay a short term obligations. The current ratio considers the current total assets of a company and current total liabilities of a company. Table Assets (Rs.) Liabilities ,26,372 51,39, ,53,336 49,78, ,6,28,154 64,6, Vol: I. Issue LI, May

2 The current ratio is assessing the company ability. The company has adequate assets and liabilities. The standard norm for the company in the current ratio is above 1.1 it means it is good to pay a short term debt. ISSN (Print): Proprietary The proprietary ratio is the proportion of shareholders equity to total assets and such as provide a rough estimate of the amount of capitalization currently used to support a business. Figure ratio Cash The cash ratio is the of a company total cash and cash equivalents to its current liabilities.the cas ratio is generally a more conservative at company ability. Table Cash (Rs.) Total Liabilities ,89,474 51,39, ,1,4 49,78, ,74,114 64,6, Cash ratio is refinement of quick ratio and it indicates to extent the assets available to pay off current liabilities. There is no standard norm for cash ratio but some country will use this and not less than.2 is acceptable. Here all the year will acceptable. Figure Cash ratio ratio Table Shareholder Funds (Rs.) Total Tangible Assets ,19,86,9 14,18,81, ,19,97,336 16,5,25, ,19,43,389 19,9,6, The proprietary ratio is high that indicates the company has a sufficient amount of equity to support the business. Here the total tangible assets will be higher than the shareholders funds. Figure Proprietary ratio Proprietary ratio Return on shareholders fund ratio Return on shareholders fund ratio is a measure of overall profitability of the business and is computed by dividing the net income after interest and tax Cash ratio Vol: I. Issue LI, May

3 Table Net Profit After Tax (Rs.) Fund ,77,696 3,19,86, ,42,71 3,19,97, ,28,325 3,19,43, INTERPRETATION: Return on shareholder fund ratio is measure the overall profitability of the company. The higher ratio means company has higher return on shareholder investment company has high shareholder funds. Figure Return on shareholders fund ratio Return on total assets The return on total assets is a ratio that measures company earnings after interest and taxes against its total assets. The ratio is considered to be an indicator of how efficiency a company is using its assets. Table Return on shareholders fund ratio Net Profit After Tax (Rs.) Category 3 Total Assets ,77,696 14,18,81, ,42,71 16,5,25, ,28,325 19,9,6, ISSN (Print): company assets. They are grading increasing towards high profit and loss. Figure Return on total assets COMPARATIVE BALANCE SHEET Comparative balancesheet 214 and 215 Table Return on total assets parti-culars increase or decreas % Rs. Rs. Rs. % ASSETS Fixed assets 4,96,464 3,76,99-1,19, Capital work in progress 1,28,184 89,577-38, assets Cash and Bank Balance 21,89,474 21,1,4-88, Advances and Other Assets 5,36,898 6,51,936 1,15, Total current assets 72,26,372 81,53,336 9,26, TOTAL 78,51,2 86,19,93 7,68, LIABILITIES fund 3,19,86,9 3,19,97,336 11,327.4 liabilities 51,39,118 49,78,276-1,6, Provisions 1,3,429 1,5,72 19, TOTAL 3,72,55,556 3,71,25,684-1,29, The comparative balance sheet of the company current assets increase 12.83% and the current liabilities will be decreased %. The fixed is decreased in this year is %. Return on total assets has no metric value for good or bad it is depend on the capital investing. 1.5 % is good for the Vol: I. Issue LI, May

4 Figure comparative balncesheet 214 and 215 ISSN (Print): Figure comparative balancesheet 215 and 216 1,, 5,, COMPARATIVE BALANCE SHEET 214 AND 215 increase (+) or decrease(-) ,, 2,, 1,, -1,, COMPARATIVE BALANCE SHEET 215 AND 216 increase (+) or decrease(-) ,, Comparative balancesheet 215 and 216 Table parti-culars increase or decrease % Rs. Rs. Rs. % ASSETS Fixed assets 3,76,99 4,24,726 47, Capital work in progress 89,577 18,83-7, assets Cash and Bank Balance 21,1,4 29,74,114 8,72, Advances and Other Assets 6,51,936 76,54,4 16,2, Total current assets 81,53,336 1,6,28,154 24,74, TOTAL 86,19,93 1,1,71,71 24,51, LIABILITIES fund 3,19,97,336 3,19,43,389-53, liabilities 49,78,276 64,6,646 14,82, Provisions 1,5,72 1,77,855 27, TOTAL 3,71,25,684 3,85,81,89 14,56, The comparative balance sheet of the company current assets and current liabilities will be increased. The fixed assets of the company percentage are In this year shareholders fund only decreased. VI.FINDINGS (i) Liquidity ratio: The current ratio of the company has adequate assets and liabilities. (ii) Solvency ratio: The proprietary ratio of the company tangible assets is higher than the shareholder funds (iii) Profitability ratio: It is measure the overall profitability of the company. They are grading increasing towards profit and loss. The company current assets will be increases and current liabilities will be decreases in the year In the same year fixed assets also decreases. Next year fixed assets will be increases. VII.CONCLUSION For this paper financial performance of IDBI federal life insurance says that the company is financially good. The overall profitability of the business in the year is The company assets are not use properly. The company current assets and current liabilities are increased in every year. Finally the company financial position level is standard in year by year. REFERENCES: Sathya and Bhattacharya et al (1997). Impact of privatization on the performance of the public sector banks. Mohi-ud-Din Sangmin and Nazir, Tabassum (21); Analyzing Financial Performance of Commercial Banks in India. Gumus Yusuf, Celikol Hakam, Date Envelopment Analysis: An Augmented method for the analysis of firm performance, international research journal of Finance and Economics 79(211). Williams. J., Nguyen N., Financial Liberalization, Crisis, and Restricting: A Comparative study of bank performance and bank Governance in South East Asia, journal of Banking and Finance 29(25) Vol: I. Issue LI, May

5 Aivazian. V. A., Y. Ge and J. Qiu, 25. The impact of leverage on firm investment: Canadian evidence, journal of corporate finance, 11, Bond. S., J. Elston, J. Mairesse, B. Mulkay, 23. Financial factors and Investment in Belgium, France, Germany and the United Kingdom: A Comparison using company panel Data, The Review of Economic and Statistics, 85(1) ISSN (Print): Vol: I. Issue LI, May