In the framework of computer assisted diagnosis of diabetic retinopathy, a new algorithm that forms a retinal vascular graph from segmented retinal vessels and determines the branching pattern of retinal arteries and veins and the artery vein ratio (AVR) in fundus images of the macula is presented and discussed. The parameters of the blood vessels in the macular region of retina are hallmark of diabetic retinopathy and allow its detection with a high sensitivity. Since detection of blood vessels is an important diagnostic task, computer assistance plays a major role. Blood vessels are found using their high gray level variation and their contours are determined by means of morphological reconstruction techniques. The detection of optic disc is very essential for this approach. We detect the optic disc by means of thresholding and morphological reconstruction technique.