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Financial Accounting
Ratio Analysis
Manufacturing : Birla Ericsson
BANK: ICICI
IT: Wipro
BIRLA ERICSSON
Liquidity Ratio


  Year       Current Ratio Quick Ratio


  MAR'08      3.848605578 1.804211725


  MAR'09      3.494907658 2.291859166


  MAR'10      4.482485756 3.189312903


  MAR'11       1.51559245 0.994797229


  MAR'12      1.258695258 0.87981811


Analysis:

 The ratios in 2009 & 2010 (3.4*4.48) show a very strong liquidity position of the company.

 In 11 & 12 the decrease in ratio may be due to the reduction in cash balances, the company may
  have utilised these funds for the purchase of fixed assets
Profitability Ratio

                                                1.4
Year     Profit Margin POA       ROE
                                                1.2

                                                  1
MAR'09 -0.048069897 1.32549442 1.111651789
                                                0.8
                                                                                           Profit Margin
                                                0.6                                        POA
MAR'10 0.028679927 1.118506349 0.983608547
                                                                                           ROE
                                                0.4

MAR'11 -0.062407124 0.754407331 0.577992019     0.2

                                                  0
MAR'12    -0.06235176 0.734744716 0.510221794          MAR'09   MAR'10   MAR'11   MAR'12
                                                -0.2




 Analysis:

  Profit Margin: After a increase in 2010 the profit margin has decreased
   considerably. This is due to decrease in turn over of the company.
  Return on Equity: The ratio of the company has been on a decreasing trend due
   to decrease in the amount of net income of the company. This indicates low
   managerial efficiency and low productivity of the capital utilized.
Turnover Ratio
                                                           7

Year     Inventory Turnover Ratio   Asset Turnover Ratio   6

                                                           5
MAR'09                5.958472531           1.308147749
                                                           4                                       Inventory Turnover
                                                                                                   Ratio
                                                           3
                                                                                                   Asset Turnover Ratio
MAR'10                 4.13772068           1.098216194
                                                           2

                                                           1
MAR'11                3.444529835           0.729297431
                                                           0
                                                               MAR'09   MAR'10   MAR'11   MAR'12
MAR'12                3.530779271           0.713254882




       Analysis:
        Inventory Turn over Ratio: this ratio has decreased from 4137 to 3.44 in 2009 &
         2010 resp. This may be due to high inventory/reduction in selling price and the
         accumulation of stocks.
        Asset Turn Over Ratio: The decrease in the ratio from the year 2010 to 2011
         shows the inability of the company to use its assets to efficiently generate sales.
Solvency Ratio
                                                    1.2


                                                     1
Year     DEBT CAPITILISATION       DEBT EQUITY
                                                    0.8

MAR'09               0.421715314      0.393392767                                             DEBT
                                                    0.6                                       CAPITILISATION
                                                                                              DEBT EQUITY
MAR'10               0.366285409      0.338435846   0.4


                                                    0.2
MAR'11               0.027432388      0.943972875

                                                     0
                                                          MAR'09   MAR'10   MAR'11   MAR'12
MAR'12               0.012714786      0.984717786




 Analysis:

  The debt equity ratio of the company is less than 1, which indicates that the
   majority of the assets are financed through equity and not by debt.

  This shows that the common share holder has low risk in investing in the
   company.
Income and Funds Flow
                                                          5000

                                                          4500

Year     Operating working capital      Operating Cash    4000

                                                          3500

Mar'09                        4331.01            404.75   3000
                                                                                                     Operating working
                                                          2500                                       capital
Mar'10                        4290.91            449.33   2000                                       Operating Cash

                                                          1500
Mar'11                        1462.71            267.88
                                                          1000

                                                           500
Mar'12                        1198.68             167.7
                                                             0
                                                                 Mar'09   Mar'10   Mar'11   Mar'12




Analysis:
 Operating working capital is reducing over the years, because of increasing current
  liabilities.
WIPRO
Liquidity Ratio
                                             2.5
Year     Current Ratio      Quick Ratio

                                              2
Mar'08        2.176285102      2.042985483

                                             1.5
Mar'09        1.103857733      1.021259802
                                                                                                Current Ratio
                                              1                                                 Quick Ratio
Mar'10        1.971297854      1.846785113

                                             0.5
Mar'11        1.968147448      1.831115312

                                              0
Mar'12        2.359647071      2.228451589         Mar'08   Mar'09   Mar'10   Mar'11   Mar'12




Analysis:
CURRENT RATIO: The current ratio of the company fell from 2.1 times to 1.1 times in the year
2008-09, but has shown an increasing trend in the next 3 years. In the year 2012 the current ratio
has improved to 2.35 which indicates the company has worked on its liquidity management in a
positive way.

QUICK RATIO: The increasing trend in quick ratio after a fall in 2009, is a positive working capital
indicator. In the year 2012, the quick ratio has risen to 2.2 which shows the strong cash position in
managing the day to day affairs of the company.
Profitability Ratio
                                                             1.4
Profit Margin        ROA                 ROE
                                                             1.2

         0.1701219         1.166745502         0.958062645    1

                                                             0.8
       0.141453924         1.199339377         0.910358736                                                      Profit Margin
                                                             0.6                                                ROA
                                                                                                                ROE
       0.204939811         1.029165805         0.850626054   0.4

                                                             0.2
       0.179826548         1.033393439         0.859046404
                                                              0
       0.145667835         1.086742331         0.903962631         Mar'08   Mar'09   Mar'10   Mar'11   Mar'12




 Analysis:

 PROFIT MARGIN RATIO: This ratio of the company has been consistent over past
 five year though a good sign but the company has made investments and has
 expanded its production thereby using its profits efficiently.

 RETURN ON EQUITY: The ROE ratio of the company has to steady at 0.9 over the
 past five years. This is almost to the standard ratio level of 1:1..this states that the
 company is giving steady results to its shareholders.
Turnover Ratio
                                                           9

                                                           8
Year     Inventory Turnover Ratio   Asset Turnover Ratio
                                                           7

Mar'08                7.005132783           1.144170646    6

                                                           5                                                Inventory Turnover
Mar'09                7.817232376           1.232980963                                                     Ratio
                                                           4
                                                                                                            Asset Turnover Ratio
Mar'10                6.442906574             0.99069433   3

                                                           2
Mar'11                5.525313836           1.012898523
                                                           1
Mar'12                6.264552286           1.074595296
                                                           0
                                                               Mar'08   Mar'09   Mar'10   Mar'11   Mar'12


   Analysis:
   INVENTORY TURNOVER RATIO : Company shows control over its stocks and material
   management.The inventory turnover ratio of 7times, 6times and 5.7 times over the last 5
   years shows the company has control over its stock and material management. the
   conversion of stock into finished product which is more than the standard of 4times, shows
   the efficiency of production of the company.
   ASSET TURNOVER RATIO : This ratio signifies the relationship between asset and turnover.
   The ratio of 1and above for the past five years shows that assets are optimally utilized to
   get proportionate sales. The operating income has been efficiently applied in assets.
Income and Funds Flow
                                    30000

Year      OWC      Operating Cash   25000


Mar'08   3954.2     16045.83708     20000


Mar'09   577.896    18648.54571     15000                                                OWC
                                                                                         Operating Cash
Mar'10   4734.3     20387.19459     10000


                                     5000
Mar'11   5121.5     23013.37174

                                        0
Mar'12   8136.4     25915.22883
                                            Mar'08   Mar'09   Mar'10   Mar'11   Mar'12




Analysis:
 Company made considerable investments in buying assets, but in turn the
   liabilities of the company are not increased , thus the operating working
   capital of the company is strong.
 Net operating profit of the company is increased marginally over the years.
   Since the operating income of the company is increased, the company has
   strong base of operating cash.
ICICI
Solvency Ratio

                                                  1.6
Year     DEBT CAPITILISATION      DEBT EQUITY
                                                  1.4
Mar'08               0.32921357      1.32921357
                                                  1.2

                                                   1
Mar'09              0.400631243     1.400631243                                              DEBT
                                                  0.8                                        CAPITILISATION
                                                  0.6                                        DEBT EQUITY
Mar'10              0.312581958     1.312593262
                                                  0.4

Mar'11              0.222509369     1.222509369   0.2

                                                   0
Mar'12              0.215304384     1.215304384         Mar'08 Mar'09 Mar'10 Mar'11 Mar'12




  Analysis:
   Majority of the assets are financed through equity and not by debt.
   Debt/Asset ratio increased in the year 2009, in this year company made
     investments and changes in business plans.
   The consistent Debt/asset ratio shows that the company is in line with the
     industry. There is considerable drop in the ratio from 40% to 21%
Liquidity Ratio

  Year     Current Liabilities         Current Ratio

  Mar'08                    42895.39        1.335629773

  Mar'09                    43746.43        1.196391797

  Mar'10                    15501.18        3.613464265

  Mar'11                    15896.35        3.003678203

  Mar'12                    17576.98        3.171438438




Analysis:

 The current ratio has shown an increasing trend from 2010, which shows sound
  liquidity position of the bank. The current ratio of the bank is much higher than the
  standard ratio of the bank.
Profitability Ratio
                                                          0.9
                                                          0.8
     PROFIT           RETURN ON        RETURN ON
Year MARGIN           EQUITY           ASSSETS            0.7
Mar'0                                                     0.6                                        PROFIT MARGIN
8       0.104815088      0.847223667        0.099218807
                                                          0.5
Mar'0                                                                                                RETURN ON
                                                          0.4
9       0.095845455      0.786045231        0.103375193                                              EQUITY
                                                          0.3
Mar'1                                                                                                RETURN ON
0       0.121971456      0.639294887        0.090807337   0.2                                        ASSSETS

Mar'1                                                     0.1
1       0.155710674      0.600515548        0.081438252
                                                           0
Mar'1                                                           Mar'08 Mar'09 Mar'10 Mar'11 Mar'12
2         0.1559745       0.68621105        0.087513997




    Analysis:
     The ROE has fallen from 2008 to 2009 but has shown improvement in 2011
      to 2012 which indicates the bank is trying to utilise the capital in an optimal
      way.
     The profit margin has increased minimally but the proportion to net income
      which acts as a sound indicator of consistency.
Turnover Ratio
                                                500000
                                                450000
Year     TOTAL ASSETS ASSET TURNOVER RATIO
                                                400000
                                                350000
Mar'08       399795.07            0.099218807
                                                300000
                                                                                              TOTAL ASSETS
Mar'09       379300.96            0.103375193   250000
                                                200000                                        ASSET
                                                                                              TURNOVER RATIO
Mar'10       363399.71            0.090807337   150000
                                                100000
Mar'11       406233.67            0.081438252
                                                50000
                                                     0
Mar'12       473647.09            0.087513997
                                                         Mar'08 Mar'09 Mar'10 Mar'11 Mar'12




 Analysis:.
  Asset Turn Over Ratio: The decrease in the ratio shows that the bank is
   struggling to manipulate its assets to improve the turn over. The ratio has
   shown a decreasing trend after2009
Solvency Ratio

                                                          DEBT EQUITY RATIO
Year           DEBT EQUITY RATIO          6.8
                                          6.6
Mar'08                      6.622769953   6.4
                                          6.2
Mar'09                      5.726828688
                                           6                                                 DEBT EQUITY
Mar'10                      5.739820339   5.8                                                RATIO
                                          5.6
Mar'11                      6.083694539
                                          5.4

Mar'12                      6.550173536   5.2
                                                Mar'08   Mar'09   Mar'10   Mar'11   Mar'12




   Analysis:

    The debt equity ratio has increased from 2010 to 2011 which indicates
     increase in volume of deposits and borrowings of the bank.
Income and Funds Flow

                                                            OPERATING CASH
                                          15000
    Year     OPERATING CASH
                                          10000
    Mar'08                    -11631.15
                                           5000

    Mar'09                    -14188.49       0
                                                   Mar'08 Mar'09 Mar'10 Mar'11 Mar'12   OPERATING CASH
                                           -5000
    Mar'10                     1869.21
                                          -10000
    Mar'11                     -6908.52
                                          -15000

    Mar'12                     9683.75    -20000



Analysis:
Presented By-

 Hitesh Makhijani
   Ankit Bhatia
Shweta Gundewar
  Anuradha Pai
  Kandarp Desai

                    - Thank You

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Financial Accounting Ratio analysis of Indian companies

  • 1. Financial Accounting Ratio Analysis Manufacturing : Birla Ericsson BANK: ICICI IT: Wipro
  • 3. Liquidity Ratio Year Current Ratio Quick Ratio MAR'08 3.848605578 1.804211725 MAR'09 3.494907658 2.291859166 MAR'10 4.482485756 3.189312903 MAR'11 1.51559245 0.994797229 MAR'12 1.258695258 0.87981811 Analysis:  The ratios in 2009 & 2010 (3.4*4.48) show a very strong liquidity position of the company.  In 11 & 12 the decrease in ratio may be due to the reduction in cash balances, the company may have utilised these funds for the purchase of fixed assets
  • 4. Profitability Ratio 1.4 Year Profit Margin POA ROE 1.2 1 MAR'09 -0.048069897 1.32549442 1.111651789 0.8 Profit Margin 0.6 POA MAR'10 0.028679927 1.118506349 0.983608547 ROE 0.4 MAR'11 -0.062407124 0.754407331 0.577992019 0.2 0 MAR'12 -0.06235176 0.734744716 0.510221794 MAR'09 MAR'10 MAR'11 MAR'12 -0.2 Analysis:  Profit Margin: After a increase in 2010 the profit margin has decreased considerably. This is due to decrease in turn over of the company.  Return on Equity: The ratio of the company has been on a decreasing trend due to decrease in the amount of net income of the company. This indicates low managerial efficiency and low productivity of the capital utilized.
  • 5. Turnover Ratio 7 Year Inventory Turnover Ratio Asset Turnover Ratio 6 5 MAR'09 5.958472531 1.308147749 4 Inventory Turnover Ratio 3 Asset Turnover Ratio MAR'10 4.13772068 1.098216194 2 1 MAR'11 3.444529835 0.729297431 0 MAR'09 MAR'10 MAR'11 MAR'12 MAR'12 3.530779271 0.713254882 Analysis:  Inventory Turn over Ratio: this ratio has decreased from 4137 to 3.44 in 2009 & 2010 resp. This may be due to high inventory/reduction in selling price and the accumulation of stocks.  Asset Turn Over Ratio: The decrease in the ratio from the year 2010 to 2011 shows the inability of the company to use its assets to efficiently generate sales.
  • 6. Solvency Ratio 1.2 1 Year DEBT CAPITILISATION DEBT EQUITY 0.8 MAR'09 0.421715314 0.393392767 DEBT 0.6 CAPITILISATION DEBT EQUITY MAR'10 0.366285409 0.338435846 0.4 0.2 MAR'11 0.027432388 0.943972875 0 MAR'09 MAR'10 MAR'11 MAR'12 MAR'12 0.012714786 0.984717786 Analysis:  The debt equity ratio of the company is less than 1, which indicates that the majority of the assets are financed through equity and not by debt.  This shows that the common share holder has low risk in investing in the company.
  • 7. Income and Funds Flow 5000 4500 Year Operating working capital Operating Cash 4000 3500 Mar'09 4331.01 404.75 3000 Operating working 2500 capital Mar'10 4290.91 449.33 2000 Operating Cash 1500 Mar'11 1462.71 267.88 1000 500 Mar'12 1198.68 167.7 0 Mar'09 Mar'10 Mar'11 Mar'12 Analysis:  Operating working capital is reducing over the years, because of increasing current liabilities.
  • 9. Liquidity Ratio 2.5 Year Current Ratio Quick Ratio 2 Mar'08 2.176285102 2.042985483 1.5 Mar'09 1.103857733 1.021259802 Current Ratio 1 Quick Ratio Mar'10 1.971297854 1.846785113 0.5 Mar'11 1.968147448 1.831115312 0 Mar'12 2.359647071 2.228451589 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis: CURRENT RATIO: The current ratio of the company fell from 2.1 times to 1.1 times in the year 2008-09, but has shown an increasing trend in the next 3 years. In the year 2012 the current ratio has improved to 2.35 which indicates the company has worked on its liquidity management in a positive way. QUICK RATIO: The increasing trend in quick ratio after a fall in 2009, is a positive working capital indicator. In the year 2012, the quick ratio has risen to 2.2 which shows the strong cash position in managing the day to day affairs of the company.
  • 10. Profitability Ratio 1.4 Profit Margin ROA ROE 1.2 0.1701219 1.166745502 0.958062645 1 0.8 0.141453924 1.199339377 0.910358736 Profit Margin 0.6 ROA ROE 0.204939811 1.029165805 0.850626054 0.4 0.2 0.179826548 1.033393439 0.859046404 0 0.145667835 1.086742331 0.903962631 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis: PROFIT MARGIN RATIO: This ratio of the company has been consistent over past five year though a good sign but the company has made investments and has expanded its production thereby using its profits efficiently. RETURN ON EQUITY: The ROE ratio of the company has to steady at 0.9 over the past five years. This is almost to the standard ratio level of 1:1..this states that the company is giving steady results to its shareholders.
  • 11. Turnover Ratio 9 8 Year Inventory Turnover Ratio Asset Turnover Ratio 7 Mar'08 7.005132783 1.144170646 6 5 Inventory Turnover Mar'09 7.817232376 1.232980963 Ratio 4 Asset Turnover Ratio Mar'10 6.442906574 0.99069433 3 2 Mar'11 5.525313836 1.012898523 1 Mar'12 6.264552286 1.074595296 0 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis: INVENTORY TURNOVER RATIO : Company shows control over its stocks and material management.The inventory turnover ratio of 7times, 6times and 5.7 times over the last 5 years shows the company has control over its stock and material management. the conversion of stock into finished product which is more than the standard of 4times, shows the efficiency of production of the company. ASSET TURNOVER RATIO : This ratio signifies the relationship between asset and turnover. The ratio of 1and above for the past five years shows that assets are optimally utilized to get proportionate sales. The operating income has been efficiently applied in assets.
  • 12. Income and Funds Flow 30000 Year OWC Operating Cash 25000 Mar'08 3954.2 16045.83708 20000 Mar'09 577.896 18648.54571 15000 OWC Operating Cash Mar'10 4734.3 20387.19459 10000 5000 Mar'11 5121.5 23013.37174 0 Mar'12 8136.4 25915.22883 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis:  Company made considerable investments in buying assets, but in turn the liabilities of the company are not increased , thus the operating working capital of the company is strong.  Net operating profit of the company is increased marginally over the years. Since the operating income of the company is increased, the company has strong base of operating cash.
  • 13. ICICI
  • 14. Solvency Ratio 1.6 Year DEBT CAPITILISATION DEBT EQUITY 1.4 Mar'08 0.32921357 1.32921357 1.2 1 Mar'09 0.400631243 1.400631243 DEBT 0.8 CAPITILISATION 0.6 DEBT EQUITY Mar'10 0.312581958 1.312593262 0.4 Mar'11 0.222509369 1.222509369 0.2 0 Mar'12 0.215304384 1.215304384 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis:  Majority of the assets are financed through equity and not by debt.  Debt/Asset ratio increased in the year 2009, in this year company made investments and changes in business plans.  The consistent Debt/asset ratio shows that the company is in line with the industry. There is considerable drop in the ratio from 40% to 21%
  • 15. Liquidity Ratio Year Current Liabilities Current Ratio Mar'08 42895.39 1.335629773 Mar'09 43746.43 1.196391797 Mar'10 15501.18 3.613464265 Mar'11 15896.35 3.003678203 Mar'12 17576.98 3.171438438 Analysis:  The current ratio has shown an increasing trend from 2010, which shows sound liquidity position of the bank. The current ratio of the bank is much higher than the standard ratio of the bank.
  • 16. Profitability Ratio 0.9 0.8 PROFIT RETURN ON RETURN ON Year MARGIN EQUITY ASSSETS 0.7 Mar'0 0.6 PROFIT MARGIN 8 0.104815088 0.847223667 0.099218807 0.5 Mar'0 RETURN ON 0.4 9 0.095845455 0.786045231 0.103375193 EQUITY 0.3 Mar'1 RETURN ON 0 0.121971456 0.639294887 0.090807337 0.2 ASSSETS Mar'1 0.1 1 0.155710674 0.600515548 0.081438252 0 Mar'1 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 2 0.1559745 0.68621105 0.087513997 Analysis:  The ROE has fallen from 2008 to 2009 but has shown improvement in 2011 to 2012 which indicates the bank is trying to utilise the capital in an optimal way.  The profit margin has increased minimally but the proportion to net income which acts as a sound indicator of consistency.
  • 17. Turnover Ratio 500000 450000 Year TOTAL ASSETS ASSET TURNOVER RATIO 400000 350000 Mar'08 399795.07 0.099218807 300000 TOTAL ASSETS Mar'09 379300.96 0.103375193 250000 200000 ASSET TURNOVER RATIO Mar'10 363399.71 0.090807337 150000 100000 Mar'11 406233.67 0.081438252 50000 0 Mar'12 473647.09 0.087513997 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis:.  Asset Turn Over Ratio: The decrease in the ratio shows that the bank is struggling to manipulate its assets to improve the turn over. The ratio has shown a decreasing trend after2009
  • 18. Solvency Ratio DEBT EQUITY RATIO Year DEBT EQUITY RATIO 6.8 6.6 Mar'08 6.622769953 6.4 6.2 Mar'09 5.726828688 6 DEBT EQUITY Mar'10 5.739820339 5.8 RATIO 5.6 Mar'11 6.083694539 5.4 Mar'12 6.550173536 5.2 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Analysis:  The debt equity ratio has increased from 2010 to 2011 which indicates increase in volume of deposits and borrowings of the bank.
  • 19. Income and Funds Flow OPERATING CASH 15000 Year OPERATING CASH 10000 Mar'08 -11631.15 5000 Mar'09 -14188.49 0 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 OPERATING CASH -5000 Mar'10 1869.21 -10000 Mar'11 -6908.52 -15000 Mar'12 9683.75 -20000 Analysis:
  • 20. Presented By- Hitesh Makhijani Ankit Bhatia Shweta Gundewar Anuradha Pai Kandarp Desai - Thank You

Editor's Notes

  1. FormulasPROFIT MARGIN = net profit/net revenuePROFIT ON ASSET = NET INCOME / TOTAL ASSETSRETURN ON EQUITY = net income/avg stockholder's equity
  2. FormulasINVENTORY TURNOVER RATIO = COST OF GOODS SOLD/AVG INVENTORYASSET TURNOVER RATIO = SALES REVENUE/TOTAL ASSETS
  3. Formulas:.Debt Capitalisation = LONG TERM DEBT/ TOTAL INVESTED CAPITAL(EQUITY).Debt Equity = TOTAL LIABILITIES/EQUITY
  4. Analysis:The net Income is reducing which shows that the organisation is not doing wellThe Operating Working Capital is negative due to higher Current Liabilities than Current Assets. If it can Wipe of this debt then it’ll make good profits.The Operating Cash is Directly proportional to Net Income and follows the same trend.Formulas:Operating Cash = NOPAT + Depreciation & Amortization.NET WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES
  5. Formulas
  6. FormulasPROFIT MARGIN = net profit/net revenuePROFIT ON ASSET = NET INCOME / TOTAL ASSETSRETURN ON EQUITY = net income/avg stockholder's equity
  7. FormulasINVENTORY TURNOVER RATIO = COST OF GOODS SOLD/AVG INVENTORYASSET TURNOVER RATIO = SALES REVENUE/TOTAL ASSETS
  8. Formulas:Operating Cash = NOPAT + Depreciation & Amortization.NET WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIESAnalysis:The net Income is reducing which shows that the organisation is not doing wellThe Operating Working Capital is negative due to higher Current Liabilities than Current Assets. If it can Wipe of this debt then it’ll make good profits.The Operating Cash is Directly proportional to Net Income and follows the same trend.
  9. AnalysisFormulas:.Debt Capitalisation = LONG TERM DEBT/ TOTAL INVESTED CAPITAL(EQUITY).Debt Equity = TOTAL LIABILITIES/EQUITY
  10. FormulasAnalysis:The current ratio has shown an increasing trend from 2010, which shows sound liquidity position of the bank. The current ratio of the bank is much higher than the standard ratio of the bank.
  11. FormulasPROFIT MARGIN = net profit/net revenuePROFIT ON ASSET = NET INCOME / TOTAL ASSETSRETURN ON EQUITY = net income/avg stockholder's equity
  12. Analysis:. Asset Turn Over Ratio: The decrease in the ratio shows that the bank is struggling to manipulate its assets to improve the turn over. The ratio has shown a decreasing trend after2009FormulasINVENTORY TURNOVER RATIO = COST OF GOODS SOLD/AVG INVENTORYASSET TURNOVER RATIO = SALES REVENUE/TOTAL ASSETS
  13. Formulas:.Debt Capitalisation = LONG TERM DEBT/ TOTAL INVESTED CAPITAL(EQUITY).Debt Equity = TOTAL LIABILITIES/EQUITYAnalysis:The debt equity ratio has increased from 2010 to 2011 which indicates increase in volume of deposits and borrowings of the bank.
  14. Formulas:Operating Cash = NOPAT + Depreciation & Amortization.NET WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES