www.icmai.in:@0.798205:0.974748:0.923794:0.974748:0.923794:0.957721:0.798205:0.957721:0.015775:0.015775:0.015775:0.005780:0.006278:0.009118:0.016807:0.011271:0.006278:0.005780:0.006278:0.010674 May 2017:@0.406839:0.977956:0.492193:0.977956:0.492193:0.962673:0.406839:0.962673:0.015974:0.009606:0.010131:0.004740:0.011452:0.011452:0.011452:0.010547 46:@0.079500:0.980264:0.102295:0.980264:0.102295:0.958570:0.079500:0.958570:0.011940:0.010855 The Management Accountant:@0.122650:0.977954:0.372489:0.977954:0.372489:0.962671:0.122650:0.962671:0.011452:0.011452:0.009009:0.004740:0.015974:0.010131:0.011452:0.009968:0.009787:0.009009:0.015974:0.009009:0.011452:0.006748:0.004740:0.013713:0.009009:0.009009:0.010131:0.011452:0.011452:0.006748:0.010131:0.011452:0.005843 l:@0.382870:0.976735:0.397343:0.976735:0.397343:0.966042:0.382870:0.966042:0.014473 COVER ST OR Y:@0.092050:0.066591:0.308984:0.066591:0.308984:0.041947:0.092050:0.041947:0.021684:0.023001:0.020391:0.020391:0.021684:0.011242:0.020391:0.014370:0.004280:0.023001:0.016980:0.003834:0.015687 What is basically argued here is that banks though might not have consciously opted for a particular :@0.092308:0.131127:0.927577:0.131127:0.927577:0.115698:0.092308:0.115698:0.017476:0.011633:0.009932:0.006911:0.003365:0.005608:0.008051:0.003365:0.010493:0.009932:0.008051:0.005608:0.009172:0.009932:0.005608:0.005156:0.009172:0.003365:0.009932:0.008069:0.009751:0.011434:0.009371:0.010692:0.003365:0.011633:0.009371:0.008069:0.009371:0.003365:0.005608:0.008051:0.003365:0.006911:0.011633:0.009932:0.006911:0.003365:0.010493:0.009932:0.011633:0.011633:0.008051:0.003365:0.006911:0.011633:0.010312:0.011434:0.009751:0.011633:0.003365:0.016155:0.005608:0.009751:0.011633:0.006911:0.003365:0.011633:0.010312:0.006911:0.003365:0.011633:0.009643:0.008919:0.009371:0.003365:0.009172:0.010312:0.011633:0.008051:0.009172:0.005608:0.010312:0.011434:0.008051:0.005156:0.009172:0.003365:0.010312:0.010493:0.006911:0.009371:0.010692:0.003365:0.005789:0.010312:0.008231:0.003365:0.009932:0.003365:0.010493:0.009932:0.008539:0.006911:0.005608:0.009172:0.011434:0.005608:0.009932:0.008286:0.004034 costing method/ technique/ model but were aware of the significance of costing in all aspects of the :@0.076930:0.147102:0.927143:0.147102:0.927143:0.131673:0.076930:0.131673:0.009226:0.010366:0.008105:0.006965:0.005663:0.011687:0.009805:0.004016:0.016210:0.009425:0.006965:0.011687:0.010366:0.010746:0.007164:0.004016:0.006965:0.009425:0.009226:0.011687:0.011687:0.005663:0.010746:0.011488:0.009425:0.007164:0.004016:0.016210:0.010366:0.010746:0.009425:0.005663:0.004016:0.010728:0.011488:0.006965:0.004016:0.014527:0.009425:0.008123:0.009425:0.004016:0.009444:0.014907:0.009986:0.008123:0.009425:0.004016:0.010366:0.006006:0.003003:0.004016:0.006965:0.011687:0.009425:0.004016:0.008105:0.005663:0.009805:0.011687:0.005663:0.005744:0.005744:0.009226:0.009986:0.011687:0.009226:0.009425:0.004016:0.010366:0.006006:0.003003:0.004016:0.009226:0.010366:0.008105:0.006965:0.005663:0.011687:0.009805:0.004016:0.005663:0.011687:0.004016:0.009986:0.005663:0.005663:0.004016:0.009986:0.008105:0.010547:0.009425:0.009226:0.006965:0.008105:0.004016:0.010366:0.006006:0.003003:0.004016:0.006965:0.011687:0.009425:0.004034 expenditure side of the Profit & Loss Accounts Statement of the bank. Various models were developed :@0.076930:0.163076:0.927215:0.163076:0.927215:0.147647:0.076930:0.147647:0.008937:0.009570:0.010511:0.009389:0.011651:0.010710:0.005626:0.006929:0.011452:0.008087:0.009389:0.003383:0.008069:0.005626:0.010710:0.009389:0.003383:0.010330:0.006006:0.002967:0.003383:0.006929:0.011651:0.009389:0.003383:0.011651:0.008250:0.010330:0.005744:0.005708:0.006929:0.003383:0.013532:0.003383:0.010511:0.010330:0.008069:0.008069:0.003383:0.012591:0.009190:0.009190:0.010330:0.011452:0.011651:0.006929:0.008069:0.003383:0.009769:0.006929:0.009950:0.006929:0.009389:0.016174:0.009389:0.011651:0.006929:0.003383:0.010330:0.006006:0.002967:0.003383:0.006929:0.011651:0.009389:0.003383:0.010511:0.009950:0.011651:0.011651:0.004867:0.003383:0.010457:0.009950:0.008250:0.005626:0.010330:0.011452:0.008069:0.003383:0.016174:0.010330:0.010710:0.009389:0.005626:0.008069:0.003383:0.014491:0.009389:0.008087:0.009389:0.003383:0.010710:0.009226:0.008937:0.009389:0.005626:0.010330:0.010511:0.009389:0.010746:0.004034 to suit bank’s requirement. A case in point is using the same Break Even concept for bank branches, :@0.076930:0.179051:0.927107:0.179051:0.927107:0.163622:0.076930:0.163622:0.006965:0.010366:0.004233:0.008105:0.011488:0.005663:0.006965:0.004233:0.010547:0.009986:0.011687:0.011687:0.003636:0.008105:0.004233:0.008123:0.009425:0.010746:0.011488:0.005663:0.008123:0.009425:0.016210:0.009425:0.011687:0.006965:0.004903:0.004233:0.012628:0.004233:0.009226:0.009986:0.008105:0.009425:0.004233:0.005663:0.011687:0.004233:0.010547:0.010366:0.005663:0.011687:0.006965:0.004233:0.005663:0.008105:0.004233:0.011488:0.008105:0.005663:0.011687:0.009805:0.004233:0.006965:0.011687:0.009425:0.004233:0.008105:0.009986:0.016210:0.009425:0.004233:0.012248:0.008123:0.009425:0.009986:0.011687:0.004233:0.010746:0.008973:0.009425:0.011687:0.004233:0.009226:0.010366:0.011687:0.009226:0.009769:0.010547:0.006965:0.004233:0.005843:0.010366:0.008286:0.004233:0.010547:0.009986:0.011687:0.011687:0.004233:0.010547:0.008467:0.009986:0.011687:0.009226:0.011687:0.009425:0.008105:0.004903:0.004034 both newly opened as well as loss making branches. We give below an example of a branch case::@0.076930:0.195026:0.886166:0.195026:0.886166:0.179597:0.076930:0.179597:0.010547:0.010366:0.006965:0.011687:0.004034:0.011687:0.009733:0.015070:0.005210:0.009226:0.004034:0.010366:0.010547:0.009425:0.011687:0.009425:0.010746:0.004034:0.009986:0.008105:0.004034:0.014527:0.009425:0.005663:0.005663:0.004034:0.009986:0.008105:0.004034:0.005663:0.010366:0.008105:0.008105:0.004034:0.016210:0.009986:0.011687:0.005663:0.011687:0.009805:0.004034:0.010547:0.008467:0.009986:0.011687:0.009226:0.011687:0.009425:0.008105:0.004903:0.004034:0.016463:0.009425:0.004034:0.009805:0.005500:0.008973:0.009425:0.004034:0.010547:0.009425:0.005663:0.010203:0.015070:0.004034:0.009986:0.011687:0.004034:0.008973:0.009606:0.009986:0.016210:0.010547:0.005663:0.009425:0.004034:0.010366:0.006006:0.003003:0.004034:0.009986:0.004034:0.010547:0.008467:0.009986:0.011687:0.009226:0.011687:0.004034:0.009226:0.009986:0.008105:0.009425:0.004903 Break Even Analysis: The Case of a Personal Banking Branch:@0.092308:0.226976:0.608485:0.226976:0.608485:0.211547:0.092308:0.211547:0.012248:0.008123:0.009425:0.009986:0.011687:0.004034:0.010746:0.008973:0.009425:0.011687:0.004034:0.012628:0.011687:0.009986:0.005210:0.009226:0.008105:0.005663:0.008105:0.004903:0.004034:0.011307:0.011687:0.009425:0.004034:0.012067:0.009986:0.008105:0.009425:0.004034:0.010366:0.006006:0.003003:0.004034:0.009986:0.004034:0.010927:0.009425:0.008467:0.008105:0.010366:0.011687:0.009986:0.005663:0.004034:0.012248:0.009986:0.011687:0.011687:0.005663:0.011687:0.009805:0.004034:0.012248:0.008467:0.009986:0.011687:0.009226:0.011687 To start with: Profit = Income – Expenditure (Variable cost + Fixed cost):@0.092308:0.242951:0.638987:0.242951:0.638987:0.227668:0.092308:0.227668:0.009299:0.009226:0.003835:0.006965:0.005843:0.009226:0.007490:0.005843:0.003835:0.013767:0.004704:0.005843:0.010547:0.004704:0.003835:0.009914:0.010547:0.006965:0.009226:0.004613:0.004613:0.005843:0.003835:0.012067:0.003835:0.005843:0.010547:0.008105:0.009226:0.015070:0.008105:0.003835:0.009046:0.003835:0.009226:0.009226:0.009226:0.008105:0.010547:0.009226:0.004704:0.005843:0.010547:0.006965:0.008105:0.003835:0.005843:0.009878:0.009226:0.006965:0.004704:0.008702:0.009226:0.004704:0.008105:0.003835:0.008105:0.009226:0.006965:0.005843:0.003835:0.012067:0.003835:0.009226:0.004704:0.008937:0.008105:0.009226:0.003835:0.008105:0.009226:0.006965:0.005843:0.005843 2.12:@0.003835:0.997178:0.003835:0.997178:0.003835:0.997178:0.003835:0.991613:0.000000:0.000000:0.018091:0.207187:1.007101:0.468242:1.007101:0.468242:1.027870:0.207187:1.027870:0.000000 = [No of units sold x price per unit] – [No. of units produced x cost per unit] – Fixed cost:@0.207187:0.274900:0.871892:0.274900:0.871892:0.259618:0.207187:0.259618:0.012067:0.003835:0.005843:0.012809:0.009226:0.003835:0.009226:0.007019:0.003835:0.010547:0.010547:0.004704:0.005843:0.006965:0.003835:0.006965:0.009226:0.004704:0.009226:0.003835:0.009226:0.003835:0.009226:0.006965:0.004704:0.008105:0.008105:0.003835:0.009226:0.008105:0.006965:0.003835:0.010547:0.010547:0.004704:0.005843:0.005843:0.003835:0.009046:0.003835:0.005843:0.012809:0.008883:0.004704:0.003835:0.009226:0.007019:0.003835:0.010547:0.010547:0.004704:0.005843:0.006965:0.003835:0.009226:0.006965:0.009226:0.009226:0.010547:0.008105:0.008105:0.009226:0.003835:0.009226:0.003835:0.008105:0.009226:0.006965:0.005843:0.003835:0.003835:0.003835:0.009226:0.008105:0.006965:0.003835:0.010547:0.010547:0.004704:0.005843:0.005843:0.003835:0.009046:0.003835:0.009226:0.004704:0.008937:0.008105:0.009226:0.003835:0.008105:0.009226:0.006965:0.005843 p :@0.142059:0.290875:0.162791:0.290875:0.162791:0.275593:0.142059:0.275593:0.009226:0.003835:0.003835:0.003835 = QP – QV – F:@0.207187:0.290875:0.311193:0.290875:0.311193:0.275593:0.207187:0.275593:0.012067:0.003835:0.011868:0.010547:0.003835:0.009046:0.003835:0.011343:0.011687:0.003835:0.009046:0.003835:0.009226 Where, Q is the no of units sold:@0.092308:0.306850:0.327005:0.306850:0.327005:0.291567:0.092308:0.291567:0.016988:0.010547:0.008105:0.006965:0.007761:0.004704:0.003835:0.011868:0.003835:0.004704:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.009226:0.003835:0.009226:0.007019:0.003835:0.010547:0.010547:0.004704:0.005843:0.006965:0.003835:0.006965:0.009226:0.004704:0.009226 P is the price per unit:@0.142059:0.322825:0.300989:0.322825:0.300989:0.307542:0.142059:0.307542:0.010547:0.003835:0.004704:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.009226:0.006965:0.004704:0.008105:0.008105:0.003835:0.009226:0.008105:0.006965:0.003835:0.010547:0.010547:0.004704:0.005843 V is the variable cost per unit:@0.142059:0.338800:0.359514:0.338800:0.359514:0.323517:0.142059:0.323517:0.011687:0.003835:0.004704:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.008883:0.009226:0.006965:0.004704:0.008702:0.009226:0.004704:0.008105:0.003835:0.008105:0.009226:0.006965:0.005843:0.003835:0.009226:0.008105:0.006965:0.003835:0.010547:0.010547:0.004704:0.005843 p is the profit:@0.142059:0.354775:0.239443:0.354775:0.239443:0.339492:0.142059:0.339492:0.009226:0.003835:0.004704:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.009226:0.006965:0.009226:0.004613:0.004613:0.005843 At the Break Even Point Profit is Zero, therefore,:@0.092308:0.370749:0.450875:0.370749:0.450875:0.355467:0.092308:0.355467:0.012809:0.005843:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.006965:0.008105:0.009226:0.009226:0.003835:0.009226:0.008521:0.008105:0.010547:0.003835:0.009661:0.009226:0.004704:0.010547:0.005843:0.003835:0.010547:0.006965:0.009226:0.004613:0.004613:0.005843:0.003835:0.004704:0.006965:0.003835:0.009226:0.008105:0.006965:0.008883:0.004704:0.003835:0.005843:0.010547:0.008105:0.006965:0.008105:0.004704:0.009226:0.006965:0.007761:0.004704 0 = Q’P – Q’V – F:@0.142059:0.386724:0.270379:0.386724:0.270379:0.371442:0.142059:0.371442:0.010547:0.003835:0.012067:0.003835:0.011868:0.004704:0.010547:0.003835:0.009046:0.003835:0.011868:0.004704:0.011687:0.003835:0.009046:0.003835:0.009226 or, :@0.092308:0.402699:0.115609:0.402699:0.115609:0.387416:0.092308:0.387416:0.009226:0.005536:0.004704:0.003835 Q’P – Q’V = F:@0.142059:0.402699:0.243116:0.402699:0.243116:0.387416:0.142059:0.387416:0.011868:0.004704:0.010547:0.003835:0.009046:0.003835:0.011868:0.004704:0.011687:0.003835:0.012067:0.003835:0.009226 or, :@0.092308:0.418674:0.115609:0.418674:0.115609:0.403391:0.092308:0.403391:0.009226:0.005536:0.004704:0.003835 Q’(P – V) = F, where Q’ is the no. of units sold at Break Even Point,:@0.142059:0.418674:0.635477:0.418674:0.635477:0.403391:0.142059:0.403391:0.011868:0.004704:0.005843:0.010547:0.003835:0.009046:0.003835:0.011687:0.005843:0.003835:0.012067:0.003835:0.006875:0.004704:0.003835:0.013243:0.010547:0.008105:0.006965:0.008105:0.003835:0.011868:0.004704:0.003835:0.004704:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.008883:0.004704:0.003835:0.009226:0.007019:0.003835:0.010547:0.010547:0.004704:0.005843:0.006965:0.003835:0.006965:0.009226:0.004704:0.009226:0.003835:0.009064:0.005843:0.003835:0.010547:0.006965:0.008105:0.009226:0.009226:0.003835:0.009226:0.008521:0.008105:0.010547:0.003835:0.009661:0.009226:0.004704:0.010547:0.005843:0.004704 or, :@0.092308:0.434649:0.115609:0.434649:0.115609:0.419366:0.092308:0.419366:0.009226:0.005536:0.004704:0.003835 Q’ = F/ (P – V), (P - V) is also known as Contribution.:@0.142059:0.434649:0.537767:0.434649:0.537767:0.419366:0.142059:0.419366:0.011868:0.004704:0.003835:0.012067:0.003835:0.009226:0.006965:0.003835:0.005843:0.010547:0.003835:0.009046:0.003835:0.011687:0.005843:0.004704:0.003835:0.005843:0.010547:0.003835:0.005843:0.003835:0.011687:0.005843:0.003835:0.004704:0.006965:0.003835:0.009226:0.004704:0.006965:0.009226:0.003835:0.009226:0.010547:0.008883:0.013767:0.010547:0.003835:0.009226:0.006965:0.003835:0.010547:0.009226:0.010547:0.005843:0.006965:0.004704:0.009226:0.010547:0.005843:0.004704:0.009226:0.010547:0.004704 At the Bank Branch Q is nothing but the Business Mix i.e. Deposits + Advances:@0.092308:0.450624:0.683292:0.450624:0.683292:0.435341:0.092308:0.435341:0.012809:0.005843:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.009226:0.010547:0.009226:0.003835:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.003835:0.011868:0.003835:0.004704:0.006965:0.003835:0.010547:0.009226:0.005843:0.010547:0.004704:0.010547:0.009226:0.003835:0.009226:0.010547:0.005843:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.010547:0.006965:0.004704:0.010547:0.008105:0.006965:0.006965:0.003835:0.015070:0.004704:0.009226:0.003835:0.004704:0.004704:0.007761:0.004704:0.003835:0.011687:0.008105:0.009226:0.009226:0.006965:0.004704:0.005843:0.006965:0.003835:0.012067:0.003835:0.012809:0.008883:0.008883:0.009226:0.010547:0.008105:0.008105:0.006965 For Personal Banking Branch, Qp, i.e. the present Business Mix is = 1031 + 83 = Rs1114 lakhs;:@0.092308:0.466598:0.811938:0.466598:0.811938:0.451316:0.092308:0.451316:0.008702:0.009226:0.006965:0.003835:0.009661:0.008105:0.007327:0.006965:0.009226:0.010547:0.009226:0.004704:0.003835:0.010547:0.009226:0.010547:0.009226:0.004704:0.010547:0.009226:0.003835:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.004704:0.003835:0.011868:0.008865:0.004704:0.003835:0.004704:0.004704:0.007761:0.004704:0.003835:0.005843:0.010547:0.008105:0.003835:0.009226:0.006965:0.008105:0.006965:0.008105:0.010547:0.005843:0.003835:0.010547:0.010547:0.006965:0.004704:0.010547:0.008105:0.006965:0.006965:0.003835:0.015070:0.004704:0.009226:0.003835:0.004704:0.006965:0.003835:0.012067:0.003835:0.010547:0.010547:0.010547:0.010547:0.003835:0.012067:0.003835:0.010547:0.010547:0.003835:0.012067:0.003835:0.011687:0.006965:0.010547:0.010547:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965:0.004704 And F = Salaries + other overheads – Non-interest income = [41.47 – 6.73*] + 6.40 – 2.21:@0.092308:0.482573:0.776787:0.482573:0.776787:0.467291:0.092308:0.467291:0.012809:0.010547:0.009226:0.003835:0.009226:0.003835:0.012067:0.003835:0.009226:0.009226:0.004704:0.009226:0.006965:0.004704:0.008105:0.006965:0.003835:0.012067:0.003835:0.009226:0.005843:0.010547:0.008105:0.006965:0.003835:0.008756:0.008521:0.008105:0.006965:0.010547:0.008105:0.009226:0.009226:0.006965:0.003835:0.009046:0.003835:0.012809:0.009226:0.010547:0.005843:0.004704:0.010547:0.005843:0.008105:0.006965:0.008105:0.006965:0.005843:0.003835:0.004704:0.010547:0.008105:0.009226:0.015070:0.008105:0.003835:0.012067:0.003835:0.005843:0.010547:0.010547:0.004704:0.010547:0.010547:0.003835:0.009046:0.003835:0.010547:0.004704:0.010547:0.010547:0.006965:0.005843:0.003835:0.012067:0.003835:0.010547:0.004704:0.010547:0.010547:0.003835:0.009046:0.003835:0.010547:0.004704:0.010547:0.010547 * the amount of staff arrears paid in this year was deducted from the salaries paid at the branch:@0.092308:0.498548:0.809261:0.498548:0.809261:0.483266:0.092308:0.483266:0.006965:0.003835:0.005843:0.010547:0.008105:0.003835:0.009226:0.015070:0.009226:0.010547:0.010547:0.005843:0.003835:0.009226:0.007019:0.003835:0.006965:0.005843:0.009226:0.005391:0.007019:0.003835:0.009226:0.007598:0.006965:0.008105:0.009226:0.007327:0.006965:0.003835:0.009226:0.009226:0.004704:0.009226:0.003835:0.004704:0.010547:0.003835:0.005843:0.010547:0.004704:0.006965:0.003835:0.008521:0.008105:0.009226:0.006965:0.003835:0.013243:0.009226:0.006965:0.003835:0.009226:0.008105:0.009226:0.010547:0.008105:0.005843:0.008105:0.009226:0.003835:0.004704:0.006965:0.009226:0.015070:0.003835:0.005843:0.010547:0.008105:0.003835:0.006965:0.009226:0.004704:0.009226:0.006965:0.004704:0.008105:0.006965:0.003835:0.009226:0.009226:0.004704:0.009226:0.003835:0.009064:0.005843:0.003835:0.005843:0.010547:0.008105:0.003835:0.009226:0.006802:0.009226:0.010547:0.008105:0.010547 = Rs38.93 lakhs:@0.142059:0.514523:0.268009:0.514523:0.268009:0.499240:0.142059:0.499240:0.012067:0.003835:0.011687:0.006965:0.010547:0.010547:0.004704:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965 And (P – V) = [Interest Income on Advances + Net interest income on Head office balances] –[Interest paid on :@0.092308:0.530498:0.926853:0.530498:0.926853:0.515215:0.092308:0.515215:0.012809:0.010547:0.009226:0.004288:0.005843:0.010547:0.004288:0.009046:0.004288:0.011687:0.005843:0.004288:0.012067:0.004288:0.005843:0.005843:0.010547:0.005843:0.008105:0.006965:0.008105:0.006965:0.005843:0.004288:0.005843:0.010547:0.008105:0.009226:0.015070:0.008105:0.004288:0.009226:0.010547:0.004288:0.012809:0.008883:0.008883:0.009226:0.010547:0.008105:0.008105:0.006965:0.004288:0.012067:0.004288:0.012809:0.008105:0.005843:0.004288:0.004704:0.010547:0.005843:0.008105:0.006965:0.008105:0.006965:0.005843:0.004288:0.004704:0.010547:0.008105:0.009226:0.015070:0.008105:0.004288:0.009226:0.010547:0.004288:0.012809:0.008105:0.009226:0.009226:0.004288:0.009226:0.004704:0.004613:0.004613:0.008105:0.008105:0.004288:0.009226:0.009226:0.004704:0.009226:0.010547:0.008105:0.008105:0.006965:0.005843:0.004288:0.009046:0.005843:0.005843:0.010547:0.005843:0.008105:0.006965:0.008105:0.006965:0.005843:0.004288:0.009226:0.009226:0.004704:0.009226:0.004288:0.009226:0.010547:0.003835 Deposits]:@0.076930:0.546473:0.145496:0.546473:0.145496:0.531190:0.076930:0.531190:0.011687:0.008105:0.009226:0.009226:0.006965:0.004704:0.005843:0.006965:0.005843 = [7.67 + 104.97] – 83.60:@0.207187:0.562448:0.411906:0.562448:0.411906:0.547165:0.207187:0.547165:0.012067:0.003835:0.005843:0.010547:0.004704:0.010547:0.010547:0.003835:0.012067:0.003835:0.010547:0.010547:0.010547:0.004704:0.010547:0.010547:0.005843:0.003835:0.009046:0.003835:0.010547:0.010547:0.004704:0.010547:0.010547 = 112.64 - 83.60:@0.207187:0.578422:0.340935:0.578422:0.340935:0.563140:0.207187:0.563140:0.012067:0.003835:0.010547:0.010547:0.010547:0.004704:0.010547:0.010547:0.003835:0.005843:0.003835:0.010547:0.010547:0.004704:0.010547:0.010547 = Rs29.04 lakhs:@0.207187:0.594397:0.333137:0.594397:0.333137:0.579115:0.207187:0.579115:0.012067:0.003835:0.011687:0.006965:0.010547:0.010547:0.004704:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965 Now this (P – V) of Rs29.04 lakhs is for a business mix of Rs1114 lakhs at the branch. We have to find out the :@0.092308:0.610372:0.926871:0.610372:0.926871:0.595089:0.092308:0.595089:0.012809:0.008883:0.013767:0.004016:0.005843:0.010547:0.004704:0.006965:0.004016:0.005843:0.010547:0.004016:0.009046:0.004016:0.011687:0.005843:0.004016:0.009226:0.007019:0.004016:0.011687:0.006965:0.010547:0.010547:0.004704:0.010547:0.010547:0.004016:0.004704:0.009226:0.009226:0.010547:0.006965:0.004016:0.004704:0.006965:0.004016:0.004704:0.009226:0.006965:0.004016:0.009226:0.004016:0.009226:0.010547:0.006965:0.004704:0.010547:0.008105:0.006965:0.006965:0.004016:0.015070:0.004704:0.009226:0.004016:0.009226:0.007019:0.004016:0.011687:0.006965:0.010547:0.010547:0.010547:0.010547:0.004016:0.004704:0.009226:0.009226:0.010547:0.006965:0.004016:0.009064:0.005843:0.004016:0.005843:0.010547:0.008105:0.004016:0.009226:0.006802:0.009226:0.010547:0.008105:0.010547:0.004704:0.004016:0.016282:0.008105:0.004016:0.010547:0.008521:0.008521:0.008105:0.004016:0.005843:0.009226:0.004016:0.004613:0.004613:0.010547:0.009226:0.004016:0.009226:0.010547:0.005843:0.004016:0.005843:0.010547:0.008105:0.003835 (P – V) for a rupee of business-mix, which is:@0.076930:0.626347:0.406407:0.626347:0.406407:0.611064:0.076930:0.611064:0.005843:0.010547:0.003835:0.009046:0.003835:0.011687:0.005843:0.003835:0.004704:0.009226:0.006965:0.003835:0.009226:0.003835:0.007255:0.010547:0.009226:0.008105:0.008105:0.003835:0.009226:0.007019:0.003835:0.009226:0.010547:0.006965:0.004704:0.010547:0.008105:0.006965:0.006965:0.005843:0.015070:0.004704:0.009226:0.004704:0.003835:0.013243:0.010547:0.004704:0.008105:0.010547:0.003835:0.004704:0.006965 = 29.04/ 1114 = 0.0261:@0.207187:0.642322:0.400147:0.642322:0.400147:0.627039:0.207187:0.627039:0.012067:0.003835:0.010547:0.010547:0.004704:0.010547:0.010547:0.006965:0.003835:0.010547:0.010547:0.010547:0.010547:0.003835:0.012067:0.003835:0.010547:0.004704:0.010547:0.010547:0.010547:0.010547 Therefore the Break Even Point Business Mix of Personal Banking Branch is:@0.092308:0.658297:0.660533:0.658297:0.660533:0.643014:0.092308:0.643014:0.010547:0.010547:0.008105:0.006965:0.008105:0.004704:0.009226:0.006965:0.008105:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.006965:0.008105:0.009226:0.009226:0.003835:0.009226:0.008521:0.008105:0.010547:0.003835:0.009661:0.009226:0.004704:0.010547:0.005843:0.003835:0.010547:0.010547:0.006965:0.004704:0.010547:0.008105:0.006965:0.006965:0.003835:0.015070:0.004704:0.009226:0.003835:0.009226:0.007019:0.003835:0.009661:0.008105:0.007327:0.006965:0.009226:0.010547:0.009226:0.004704:0.003835:0.010547:0.009226:0.010547:0.009226:0.004704:0.010547:0.009226:0.003835:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.003835:0.004704:0.006965 Q’ = F/(P – V) = 38.93/0.0261 = Rs1492 lakhs, i.e. with the existing CD ratio of 8% the business mix can :@0.142059:0.674271:0.926455:0.674271:0.926455:0.658989:0.142059:0.658989:0.011850:0.004686:0.003256:0.012049:0.003256:0.009208:0.006947:0.005825:0.010529:0.003256:0.009027:0.003256:0.011669:0.005825:0.003256:0.012049:0.003256:0.010529:0.010529:0.004686:0.010529:0.010529:0.006947:0.010529:0.004686:0.010529:0.010529:0.010529:0.010529:0.003256:0.012049:0.003256:0.011669:0.006947:0.010529:0.010529:0.010529:0.010529:0.003256:0.004686:0.009208:0.009208:0.010529:0.006947:0.004686:0.003256:0.004686:0.004686:0.007743:0.004686:0.003256:0.013749:0.004686:0.005825:0.010529:0.003256:0.005825:0.010529:0.008087:0.003256:0.007743:0.009208:0.004686:0.006947:0.005825:0.004686:0.010529:0.009208:0.003256:0.010529:0.011669:0.003256:0.006784:0.009046:0.005825:0.004686:0.009208:0.003256:0.009208:0.007001:0.003256:0.010529:0.013930:0.003256:0.005825:0.010529:0.008087:0.003256:0.009208:0.010529:0.006947:0.004686:0.010529:0.008087:0.006947:0.006947:0.003256:0.015052:0.004686:0.009208:0.003256:0.008087:0.009208:0.010547:-0.459195 be divided as [Deposits of Rs1372lakhs + Advances of Rs120lakhs].:@0.076930:0.690246:0.588711:0.690246:0.588711:0.674964:0.076930:0.674964:0.009226:0.008105:0.003835:0.009226:0.004360:0.009226:0.004704:0.009226:0.008105:0.009226:0.003835:0.009226:0.006965:0.003835:0.005843:0.011687:0.008105:0.009226:0.009226:0.006965:0.004704:0.005843:0.006965:0.003835:0.009226:0.007019:0.003835:0.011687:0.006965:0.010547:0.010547:0.010547:0.010547:0.004704:0.009226:0.009226:0.010547:0.006965:0.003835:0.012067:0.003835:0.012809:0.008883:0.008883:0.009226:0.010547:0.008105:0.008105:0.006965:0.003835:0.009226:0.007019:0.003835:0.011687:0.006965:0.010547:0.010547:0.010547:0.004704:0.009226:0.009226:0.010547:0.006965:0.005843:0.004704 For the Branch to Break Even, Strategy 1 available is to increase Rs378 lakhs [1492-1114 = 378] @ CD Ratio :@0.092308:0.706221:0.926871:0.706221:0.926871:0.690939:0.092308:0.690939:0.008702:0.009226:0.006965:0.004197:0.005843:0.010547:0.008105:0.004197:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.004197:0.005843:0.009226:0.004197:0.010547:0.006965:0.008105:0.009226:0.009226:0.004197:0.009226:0.008521:0.008105:0.010547:0.004704:0.004197:0.009226:0.005843:0.006802:0.009064:0.005843:0.008105:0.009226:0.009226:0.004197:0.010547:0.004197:0.008521:0.008883:0.009226:0.004704:0.004704:0.008702:0.009226:0.004704:0.008105:0.004197:0.004704:0.006965:0.004197:0.005843:0.009226:0.004197:0.004704:0.010547:0.008105:0.006965:0.008105:0.009226:0.006965:0.008105:0.004197:0.011687:0.006965:0.010547:0.010547:0.010547:0.004197:0.004704:0.009226:0.009226:0.010547:0.006965:0.004197:0.005843:0.010547:0.010547:0.010547:0.010547:0.005843:0.010547:0.010547:0.010547:0.010547:0.004197:0.012067:0.004197:0.010547:0.010547:0.010547:0.005843:0.004197:0.016662:0.004197:0.010547:0.011687:0.004197:0.011144:0.009064:0.005843:0.004704:0.009226:0.003835 of 8%, to increase Deposits by Rs348 lakhs and Advances by Rs30 lakhs.:@0.076930:0.722196:0.623338:0.722196:0.623338:0.706913:0.076930:0.706913:0.009226:0.007019:0.003835:0.010547:0.013948:0.004704:0.003835:0.005843:0.009226:0.003835:0.004704:0.010547:0.008105:0.006965:0.008105:0.009226:0.006965:0.008105:0.003835:0.011687:0.008105:0.009226:0.009226:0.006965:0.004704:0.005843:0.006965:0.003835:0.008684:0.009226:0.003835:0.011687:0.006965:0.010547:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965:0.003835:0.009226:0.010547:0.009226:0.003835:0.012809:0.008883:0.008883:0.009226:0.010547:0.008105:0.008105:0.006965:0.003835:0.008684:0.009226:0.003835:0.011687:0.006965:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965:0.004704 Looking into the past performance of the branch, an increase of Business Mix of Rs378 lakhs in one year appears :@0.092308:0.738171:0.927215:0.738171:0.927215:0.722888:0.092308:0.722888:0.009136:0.009136:0.009136:0.009136:0.004613:0.010457:0.009136:0.003166:0.004613:0.010457:0.005753:0.009136:0.003166:0.005753:0.010457:0.008014:0.003166:0.009136:0.009136:0.006875:0.005753:0.003166:0.009136:0.008014:0.006875:0.004613:0.009136:0.007037:0.014979:0.009136:0.010457:0.008014:0.008014:0.003166:0.009136:0.006929:0.003166:0.005753:0.010457:0.008014:0.003166:0.009136:0.006712:0.009136:0.010457:0.008014:0.010457:0.004613:0.003166:0.009136:0.010457:0.003166:0.004613:0.010457:0.008014:0.006875:0.008014:0.009136:0.006875:0.008014:0.003166:0.009136:0.006929:0.003166:0.010457:0.010457:0.006875:0.004613:0.010457:0.008014:0.006875:0.006875:0.003166:0.014979:0.004613:0.009136:0.003166:0.009136:0.006929:0.003166:0.011596:0.006875:0.010457:0.010457:0.010457:0.003166:0.004613:0.009136:0.009136:0.010457:0.006875:0.003166:0.004613:0.010457:0.003166:0.009136:0.010457:0.008014:0.003166:0.008430:0.008014:0.009136:0.006875:0.003166:0.008973:0.009136:0.009136:0.008014:0.009136:0.007236:0.006965:0.003835 to be of a bit of a tall order.:@0.076930:0.754146:0.278792:0.754146:0.278792:0.738863:0.076930:0.738863:0.005843:0.009226:0.003835:0.009226:0.008105:0.003835:0.009226:0.007019:0.003835:0.009226:0.003835:0.009226:0.004704:0.005843:0.003835:0.009226:0.007019:0.003835:0.009226:0.003835:0.005843:0.009226:0.004704:0.004704:0.003835:0.009226:0.006965:0.009226:0.008105:0.005355:0.004704 Let us therefore look at Strategy 2: To reduce F, i.e. the Fixed Cost at the Branch. Let us find out the breakeven :@0.092308:0.770121:0.926727:0.770121:0.926727:0.754838:0.092308:0.754838:0.009226:0.008105:0.005843:0.004487:0.010547:0.006965:0.004487:0.005843:0.010547:0.008105:0.006965:0.008105:0.004704:0.009226:0.006965:0.008105:0.004487:0.004704:0.009226:0.009226:0.009226:0.004487:0.009064:0.005843:0.004487:0.009226:0.005843:0.006802:0.009064:0.005843:0.008105:0.009226:0.009226:0.004487:0.010547:0.004704:0.003763:0.009299:0.009226:0.004487:0.006965:0.008105:0.009226:0.010547:0.008105:0.008105:0.004487:0.006875:0.004704:0.004487:0.004704:0.004704:0.007761:0.004704:0.004487:0.005843:0.010547:0.008105:0.004487:0.009226:0.004704:0.008937:0.008105:0.009226:0.004487:0.010547:0.009226:0.006965:0.005843:0.004487:0.009064:0.005843:0.004487:0.005843:0.010547:0.008105:0.004487:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.004704:0.004487:0.009226:0.008105:0.005843:0.004487:0.010547:0.006965:0.004487:0.004613:0.004613:0.010547:0.009226:0.004487:0.009226:0.010547:0.005843:0.004487:0.005843:0.010547:0.008105:0.004487:0.009226:0.006965:0.008105:0.009226:0.008684:0.008105:0.008521:0.008105:0.010547:0.003835 Level of F’ at the Branch::@0.076930:0.786095:0.264825:0.786095:0.264825:0.770813:0.076930:0.770813:0.009226:0.008105:0.008521:0.008105:0.004704:0.003835:0.009226:0.007019:0.003835:0.009226:0.004704:0.003835:0.009064:0.005843:0.003835:0.005843:0.010547:0.008105:0.003835:0.010547:0.006802:0.009226:0.010547:0.008105:0.010547:0.004704 Qp = F’/(P – V) :@0.207187:0.802070:0.323386:0.802070:0.323386:0.786788:0.207187:0.786788:0.011868:0.009226:0.003835:0.012067:0.003835:0.009226:0.004704:0.006965:0.005843:0.010547:0.003835:0.009046:0.003835:0.011687:0.005843:0.003835 Or, :@0.142059:0.818045:0.168001:0.818045:0.168001:0.802762:0.142059:0.802762:0.011868:0.005536:0.004704:0.103875 F’ = Qp x (P – V) = 1114 x 0.0261 = 29.04 lakhs;:@0.207187:0.818045:0.581583:0.818045:0.581583:0.802762:0.207187:0.802762:0.009226:0.004704:0.003835:0.012067:0.003835:0.011868:0.009226:0.003835:0.009226:0.003835:0.005843:0.010547:0.003835:0.009046:0.003835:0.011687:0.005843:0.003835:0.012067:0.003835:0.010547:0.010547:0.010547:0.010547:0.003835:0.009226:0.003835:0.010547:0.004704:0.010547:0.010547:0.010547:0.010547:0.003835:0.012067:0.003835:0.010547:0.010547:0.004704:0.010547:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965:0.004704 i.e. Strategy 2 is to reduce Fixed cost from Rs38.93 lakhs to Rs29.04 lakhs, which may be possible with a :@0.092308:0.849995:0.927197:0.849995:0.927197:0.834712:0.092308:0.834712:0.004903:0.004903:0.007960:0.004903:0.005337:0.009425:0.006042:0.007001:0.009263:0.006042:0.008304:0.009425:0.009425:0.005337:0.010746:0.005337:0.004903:0.007164:0.005337:0.006042:0.009425:0.005337:0.007164:0.008304:0.009425:0.010746:0.008304:0.008304:0.005337:0.009425:0.004903:0.009136:0.008304:0.009425:0.005337:0.008304:0.009425:0.007164:0.006042:0.005337:0.004903:0.007164:0.009425:0.015269:0.005337:0.011886:0.007164:0.010746:0.010746:0.004903:0.010746:0.010746:0.005337:0.004903:0.009425:0.009425:0.010746:0.007164:0.005337:0.006042:0.009425:0.005337:0.011886:0.007164:0.010746:0.010746:0.004903:0.010746:0.010746:0.005337:0.004903:0.009425:0.009425:0.010746:0.007164:0.004903:0.005337:0.013442:0.010746:0.004903:0.008304:0.010746:0.005337:0.015269:0.008901:0.009425:0.005337:0.009425:0.008304:0.005337:0.009425:0.009425:0.007164:0.007164:0.004903:0.009425:0.004903:0.008304:0.005337:0.013966:0.004903:0.006042:0.010746:0.005337:0.009226:-0.698740 combination of the following three strategies::@0.076930:0.865970:0.419468:0.865970:0.419468:0.850687:0.076930:0.850687:0.008105:0.009226:0.015070:0.009226:0.004704:0.010547:0.009064:0.005843:0.004704:0.009226:0.010547:0.003835:0.009226:0.007019:0.003835:0.005843:0.010547:0.008105:0.003835:0.004704:0.009226:0.004704:0.004704:0.008883:0.013767:0.004704:0.010547:0.009226:0.003835:0.005843:0.010547:0.006965:0.008105:0.008105:0.003835:0.006965:0.005843:0.006802:0.009064:0.005843:0.008105:0.009226:0.004704:0.008105:0.006965:0.004704 Increase Non-interest income, say by Rs2 lakhs;:@0.092308:0.881944:0.452177:0.881944:0.452177:0.866662:0.092308:0.866662:0.005843:0.010547:0.008105:0.006965:0.008105:0.009226:0.006965:0.008105:0.003835:0.012809:0.009226:0.010547:0.005843:0.004704:0.010547:0.005843:0.008105:0.006965:0.008105:0.006965:0.005843:0.003835:0.004704:0.010547:0.008105:0.009226:0.015070:0.007761:0.004704:0.003835:0.006965:0.008702:0.009226:0.003835:0.008684:0.009226:0.003835:0.011687:0.006965:0.010547:0.003835:0.004704:0.009226:0.009226:0.010547:0.006965:0.004704 Reduce Staff; and :@0.092308:0.897919:0.226978:0.897919:0.226978:0.882637:0.092308:0.882637:0.010981:0.008105:0.009226:0.010547:0.008105:0.008105:0.003835:0.009226:0.005843:0.009226:0.005391:0.004704:0.004704:0.003835:0.009226:0.010547:0.009226:0.003835 Expenditure Management (A Rupee Saved is a Rupee Earned).:@0.092308:0.913894:0.555822:0.913894:0.555822:0.898612:0.092308:0.898612:0.009226:0.009226:0.009226:0.008105:0.010547:0.009226:0.004704:0.005843:0.010547:0.006965:0.008105:0.003835:0.015070:0.009226:0.010547:0.009064:0.008883:0.008105:0.015070:0.008105:0.010547:0.005843:0.003835:0.005843:0.012809:0.003835:0.010620:0.010547:0.009226:0.008105:0.008105:0.003835:0.009226:0.008521:0.008521:0.008105:0.009226:0.003835:0.004704:0.006965:0.003835:0.009226:0.003835:0.010620:0.010547:0.009226:0.008105:0.008105:0.003835:0.009226:0.009226:0.007417:0.010547:0.008105:0.009226:0.005843:0.004704