Sonali Yadav, Gitarattan International Business School, Delhi, India

The current study has been carried out in Punjab National Bank in order to study the relationship between various indicators of profitability and debt coverage. Indicators of profitability were Interest Spread, Adjusted Cash Margin (%), Net Profit Margin, Return on Long Term Fund (%), Return on Net Worth (%) and Return on Assets Including Revaluation and the indicators of debt coverage were Credit Deposit Ratio, Investment Deposit Ratio, Cash Deposit Ratio, Total Debt to Owners Fund and Financial Charges Coverage Ratios. One by one the relationship between these variables was checked and it was incovered that total Debt to Owner’s Fund’ has the maximum impact on Interest Spread. This result is significant for PNB to assess the impact of various components of ‘Debt Coverage’ on ‘Profitability’ components as we can infer that not all ‘Debt Coverage’ components have a significant impact on ‘Profitability’ components.

Keywords: Adjusted Cash Margin, Interest Spread, Net Profit Margin, Return on Assets, Return on Long Term Fund, Return on Net Worth.

Suggested citation: Yadav, S.(2014). Impact of ‘debt coverage’ on ‘profitability’ in banking sector. Skyline Business Journal, Volime 10, Issue 1,pp 26-33.

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Yadav, S.(2014). Impact of ‘debt coverage’ on ‘profitability’ in banking sector. Skyline Business Journal, Volime 10, Issue 1,pp 26-33.