Financial Analysis and the Best Opportunities

Abstract

Abstract Banking sector is the major source of finance for modern trade and commerce. The economic progress of a country depends upon financial intermediaries such as banks. The performance of Indian banks has remained robust during the past few years despite the challenges due to both domestic and international developments. From the point of investment decisions, fundamental analysis is quite significant. It provides an insight into the economic performance of a business enterprise. This research was undertaken to understand the performance of the Indian Banking system. The present study makes it clear that EPS is the strongest indicator for an investor to look for before investing his money in a company. A company may have high OPM, NPM, ROE, PER, DPS and DPR but there is no significant relationship found between these variables and EPS. Moreover in order to which company will be more profitable, an investor should compare the EPS of all companies taken into consideration because a company may be having profits but it may not always give dividends and can keep the profits as retained earnings. Therefore EPS becomes the best indicator for investment decision. Keywords: Operating Profit Margin (OPM), Net Profit Margin (NPM), Return on Equity (ROE), Earnings per Share (EPS), Price Earnings Ratio (PER), Dividend per Share (DPS), Dividend Payout Ratio (DPR), Banking system, Fundamentals.