Course Name: Topic: Name: ID: Course Code: Date: Instructor Name:

Financial Reporting Ratio Analysis

BM-25964 FIN 503 15th Nov, 2013 Vijay kumar

Vision: To become a dynamic andefficient bank providing integratedsolutions in order to be the firstchoice bank for the customers. Mission: To provide value added services to ourcustomers To provide high tech innovative solutions tomeet customers requirements To create sustainable value through growth,efficiency and diversity for all stakeholders To provide a challenging work environmentand reward dedicated team membersaccording to their abilities and performance To play a proactive role in contributingtowards the society Core values: Integrity Excellence in Service High Performance Innovation and Growth History: Allied Bank is a commercial bank in Pakistan. Allied Bank, with its registered Offices in Karachi and Lahore, is one of the largest banks within the country with over 900 branches, connected to an online network. It was the first Muslim bank established in Pakistan before independence (1942) with the name of Australasia Bank. It was named as Allied Bank of Pakistan from Australasia Bank Limited in 1974, and Sarhad Bank Ltd, Lahore Commercial Bank Ltd and Pak Bank Ltd were also merged in it. Functions: Personal Banking of Allied bank Limited: Everyday Account Lifestyle Banking Saving & Term Deposit Credit & Debit Cards Domestic Remittances Banc assurance E-Banking Services Business Banking Of Allied Bank Limited: Corporate And Investment Banking Transaction And Business Accounts Home Remittances To Pakistan Saving & Term Deposits

 Cash Management Solutions Trade Services SME Financing Agriculture Financing Services of Allied Bank Limited: Branches & ATMs Extended Hours Banking Allied Phone Banking Online Banking Customer Support Safe Deposit Lockers Utility Bills Payment Hajj Services Demand Draft Pay Order Allied Bank Limited Branches: Allied bank is the largest banking network of Pakistan with more than 830 online branches all over the Pakistan. So now you have always the quick and convenient access to your Allied Bank Limited accounts and get every banking service.

BALANCE SHEET ASSETS Cash and balances with treasury and other banks lending to financial institutions Investments - Gross Advances - Gross Operating Fixed asstes Other assets Total assets - Gross Provisions against non - performing advances Provisions against diminution in value of investment Total asstes - net of provision LIABILITIES Customer deposits Inter bank borrowings Bills payable Other liabilities Sub-ordinated loans Total Liabilities NET ASSETS Share capital Share premium Reserves Un - appropriated profit Equity - Tier I Surplus on revaluation of assets Total Equity PROFITABILITY Markup / Return / Interest earned Markup / Return / Interest expensed Net Markup / Interest income Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Non interest income

44,381 10,721 269,351 288,889 19,871 18,455 651,668 (17,805) (1,948) 631,915

38,159 1,362 198,398 262,137 18,087 17,964 536,107 (17,704) (2,704) 515,699

31,845 11,489 123,855 267,776 15,360 17,719 468,044 (15,431) (2,682) 449,931

27,716 28,123 96,975 249,887 12,447 17,955 433,103 (12,543) (2,186) 418,374

24,75 15,79 84,60 223,64 11,13 18,39 379,31

(10,668

(1,956 366,69

514,707 38,916 6,203 15,684 5,490 581,000 50,915 9,463 10,906 22,558 42,927 7,988 50,915

399,562 49,993 4,015 13,296 5,493 472,359 43,340 8,603 202 8,561 20,255 37,621 5,719 43,340

371,284 20,774 4,119 12,284 5,495 413,956 35,975 7,821 984 6,533 15,829 31,167 4,808 35,975

328,875 39,819 3,162 11,061 5,497 388,414 29,960 7,110 1,695 4,888 12,198 25,891 4,069 29,960

297,47 27,77 2,95 13,63 2,49 344,33 22,35 6,46 2,34 3,46 8,53 20,80 1,55 22,35

49,503 (31,142) 18,361 3,169 10,353 272 13,794

51,814 (26,643) 25,171 3,395 3,507 48 6,950

44,993 (22,428) 22,565 2,910 2,511 251 5,672

41,122 (22,422) 18,700 3,470 2,452 36 5,958

30,57 (17,273 13,29

3,26 1,57 5 4,89

Gross income Operating expenses Profit Before provisions Donations Provisions - (charge) / reversal Profit Before taxation taxation profit after taxation

32,155 (14,818) 17,337 (104) (1,362) 15,871 (4,195) 11,676

32,121 (13,684) 18,437 (61) (3,267) 15,109 (4,969) 10,140

28,237 (11,529) 16,708 (38) (4,326) 12,344 (4,118) 8,226

24,658 (9,609) 15,049 (97) (4,416) 10,536 (3,414) 7,122

18,19 (8,431 9,76 (82 (3,561 6,12 (1,964 4,15

Ratio analysis

Return on as equity = __EBIT_ x 100 Total equity Return on assets = Net income x 100 Total assets Gross spread ratio = Net markup income x 100 Gross Income Earning asset to total asset = Average earning Assets x 100 Average total assets Cash dividend per ratio = total dividend per share x 100 Earning per share

2012 29.0% 2.03% 36.7% 86.91 % 6.5

2011 29.5% 2.10% 48.6% 85.61% 5 10.71 4.6

2010 28.8% 1.89% 50.2% 85.74% 4 8.69 6.7

2009 30.5 % 1.81 % 45.5 % 86.1 1% 4 7.53 5.9

2008 21.2% 1.21% 43.5% 84.92 % 2.5 4.39 4.9

2007 23.5% 1.4% 50.24% 84.59% 3 4.31 17.2

EPS = Net income dividend on preferred stock x 100 12.34 average outstanding share Price to earnings ratio = market price per equity share x 100 6.0 Earning per share Dividend payout ratio = Dividend x 100 Net income Return on capital employed = EBIT x 100 capital employed Advance /deposit ratio ratio = advances x 100 Deposit 61% 26.5%

51% 26.7%

48% 25.6%

50% 28.0 % 76.0 %

54% 19.8%

66% 21.6%

56.1%

65.6%

72.3%

75.2%

67.6%

RETURN ON EQUITY
35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2012 2011 2010 2009 2008 2007

RETURN ON ASSETS

2.50%

2.00%

1.50%

1.00%

0.50%

0.00% 2012 2011 2010 2009 2008 2007

GROSS SPREAD RATIO

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00% 2012 2011 2010 2009 2008 2007

EARNING ASSET TO TOTAL ASSET RATIO

87.50% 87.00% 86.50% 86.00% 85.50% 85.00% 84.50% 84.00% 83.50% 83.00% 2012 2011 2010 2009 2008 2007

CASH DIVIDEND RATIO

7 6 5 4 3 2 1 0 2012 2011 2010 2009 2008 2007

EARNING PER SHARE

14 12 10 8 6 4 2 0 2012 2011 2010 2009 2008 2007

PRICE TO EARNING RATIO

20 18 16 14 12 10 8 6 4 2 0 2012 2011 2010 2009 2008 2007

DIVIDEND PAYOUT RATIO

70% 60% 50% 40% 30% 20% 10% 0% 2012 2011 2010 2009 2008 2007

RETURN ON CAPITAL EMPLOYED

30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2012 2011 2010 2009 2008 2007

ADVANCES / DEPOSITS RATIO

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2012 2011 2010 2009 2008 2007

Interpretation of return on equity ratio: Interpretation of return on asset ratio: Interpretation of gross spread ratio:

Interpretation of earning asset to total asset ratio: Interpretation of cash dividend per ratio: Interpretation of earning per share ratio: Interpretation of price to earning ratio: Interpretation of dividend payout ratio: Interpretation of return on capital employed: Interpretation of advances/ deposit ratio:

Summary In this report we analyze Allied Banks information regarding all the items of the financial statement. As the ratio analysis is concerned with all the aspect of a firms financial analysis liquidity, turnover, profitability, capital structure ratios and overall performance of Allied Banks, ratios really help to know financial characteristics of Allied Banks. After finding all the ratios we can say that the financial health of Allied Banks is sound enough and it appears positive with its income statement and its balance sheet. We found that the company net profit ratio in 2010 was 4.81%.the current ratio in 2013 is 1.57 but in 2012 it was 1.72. Company current ratio is very good and shows highly liquidity. In short through all applied ratios we find strengths and weaknesses of Allied Banks. The sales revenues of the company for the period under view and amounted to Rs. 1745974 million as against Rs. 1724539 million of the same period last year. The gross profit was recorded as Rs. 160945 million as against Rs. 190789 million of same period last year. The profit after tax was 22884 million against Rs. 46608 million of the same period last year.