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Banks play an important role in the economic development of a nation. They have control over a large part of the supply of money in circulation. Banks are a fundamental component of the financial system, and are also active players in the financial markets. In this article an attempt is made to study the performance of the public sector banks in the stock market based on ratio analysis. For this study ten public sector banks are selected.
The share market is often considered as the main engine driving the economy. Equity market is the only liquid financial market in many emerging countries and hence its role in economic development cannot be overemphasized. The investment in stock involves many risks. The investors have to carry and an analysis before investing in any stocks. Most of the investors are unaware about the analysis to be carried out before investing. This study involves analysis of earnings per share, price to earnings ratio, book value and DPS, ROA, Current Ratio and Quick Ratio of the banks. The technical analysis helps the investor to know whether the stock is in over sold region or over bought region and to find any trend reversals. Based on these analyses investors can make decisions to buy or sell stocks.
