Thursday, April 18, 2019

How would you evaluate the preformance of a bank using piblished Essay

How would you evaluate the preformance of a lodge using piblished accounting data . What other data would you use in this evaluation - Essay use(Srinivasan, 2009).Financial proportion analysis is considered as one of the most important tools that atomic number 18 being apply to evaluate the performance of any bank. It is important to none that the financial ratios for a bank atomic number 18 middling different as comp atomic number 18d to the typical ratio analysis for any manufacturing firm. Due to this basic difference, there are some additional ratios that are being computed for evaluating the basic performance of a bank. These ratios include net scratch margin, provision for loan losses, loans to assets, capital adequacy etc which are computed in order to provide a deeper acuteness into the overall financial performance of any bank.This paper will discuss as to how the performance of a bank is evaluated and what are some of the tools including financial ratio analysis wh ich posterior be utilize to effectively evaluate the performance of the bank and the type of data required to make such an analysis.Financial dimension analysis is one of the leading tools that are being used to evaluate the performance of a bank. These are common sets of financial ratios that are used to compute various financial indicators and by making either trend analysis or industry comparison, the overall performance of the bank can be evaluated. These ratios areReturn on assets is computed by dividing the net income earned by the Bank with its total assets. This is an important ratio because it informs us about the overall efficiency of the banks assets i.e. how the total assets of the bank are used by the management in producing the desired results for its shareholders.Return on assets is also considered important ratio because it can be a better judge of the overall efficiency of the banks management i.e. if communicate on assets is low it can indicate that the overa ll management efficiency in utilizing the assets of the firm is not entirely up to the satisfaction and management shall improve its practices and internal

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