All financial interpretation of Dhaka Bank PDF

Preview

Summary

All financial interpretation of Dhaka Bank from the year of 2012 to 2016....

Description

Interpretation: Total asset turnover ratio Total asset turnover ratio denotes the generation of revenue by the bank for every taka in assets. The ratio of the bank increased from 4.12% to 4.17% within 2012-2016. Generally speaking, the higher the asset turnover ratio, the better the company is performing. But such banks which have large asset bases will have similar lower asset turnover conversely.

Interpretation: current ratio A higher current ratio is always more favorable than a lower current ratio because it shows the bank can more easily make current debt payments. In case of Lankabangla portal , the ratio gradually increases from 1.11 in 2012 to 1.15 in 2016 but where the liquidity ratio 1:1 is considered as a standard for the banking industries this data shows that this bank has more than required current assets in order to pay the liabilities which is a positive side. Interpretation: Debt to Asset Ratio This ratio measures the proportion of total assets to total liabilities provided by the bank’s creditors. The data in the table shows that the debt to assets ratio of the bank has been quite stable in between 88.74% to 86.83% for the last couple of years. This stabled debt ratio indicates strong liquidity position of the organization. Interpretation: Debt to equity Ratio A lower debt to equity ratio usually implies a more financially stable business. Companies with a higher debt to equity ratio are considered more risky to creditors and investors than companies with a lower ratio. So, here in case of Lankabangla portal this debt ratio gradually decreased from 840.36 to 659.57 which means that it is getting more financially stable day by day. Interpretation: Debt To Cash flow Ratio The higher the percentage ratio, the better the company's ability to carry and service its total debt. This ratio of the bank is satisfactory as it kept on increasing over the years, from 0.043266682 to 0.089650291 Interpretation: Net Profit Margin Net profit margins show how much of each taka collected by a bank as revenue translates into profit. The net profit margin in this case is also fluctuating because though it was on an increase in 2012 from 32.21% to 47.63% in 2015 but it fell down though in 2014 to 42.69% however, it recovered to 57% in 2016 so it is satisfactory. Interpretation: Pretax Profit Margin The higher the pretax profit margin, the more profitable the company. Like other profit margins, this ratio also kept increasing continuously from 2012 to 2016 which is that much satisfactory.And the percentage is 63.77% to 92.92%

Interpretation: Operating Profit Margin Banks with high operating profit margins are generally more well-equipped to pay for expenses and interest on obligations. In this case, the operating profit margin of the bank is fluctuating because it increases in 2012 from 73.04% to 75.95% in 2013 and again increases to 86.02% in 2014. In 2015 it decreases to 85.75% but increases to 98.74% again. Interpretation: Return On Asset A higher ratio is more favorable to investors because it shows that the bank is more effectively managing its assets to produce greater amounts of net income. A positive ROA ratio usually indicates an upward profit trend as well. This ratio in case of this bank is kind of fluctuating as it increased in 2012 from 4.12% to 4.90% in 2013 but decreased in 2016 to 4.17% so this is not so positive for the bank. Interpretation: Operating Return On Asset A higher ratio is more favorable to investors because it shows that the bank is more effectively managing its assets to produce greater amounts of operating income. A positive ratio usually indicates an upward operating profit trend as well. And for Lankabangla the ratio kept on increasing constantly in 2012 from 5.48% to 6.56% in 2016 which was really good at all. Interpretation: Operating Return on Equity A higher ratio is more favorable to investors because it shows that the bank is more effectively managing its assets to produce greater amounts of operating income. A positive ratio usually indicates an upward operating profit trend as well. But for Lankabangla the ratio kept on declining constantly apart from 2012 to 2013.The percentage is 44.25% to31.75% from 2013 to 2016. Interpretation: Comparative Balance Sheet 2012-13 The comparative balance sheet of the company reveals that during 2013 there has been an increase in assets of 17,896,437,826 i.e. 15.49%. Liabilities have relatively increased by 16,517,066,150, i.e. 15.34% and shareholder’s equity has increased by 1,379,371,676 or 17.54%. . (ii) The current assets have increased by Rs 152000 i.e. 26.67% and cash has increased by Rs 20,000. The current liabilities have increased only by Rs 20000 i.e. 12.9%. This further confirms that the company has used long-term finances even for the current assets resulting into an improvement in the liquidity position of the company. (iii) Reserves and surplus have decreased from Rs 330,000 to Rs 222,000 i.e. 32.73% which shows that the company has utilized reserves and surplus for the payment of dividends to shareholders either in cash

or by way of bonus. (iv) The overall financial position of the company is satisfactory.

Interpretation : Comparative Income Statement 2012-13 Interpretation: The comparative income statement given above shows that there has been a decrease in interest income of -1.32%. Also the interest expenses have decreased by -8.93%. But there has been an increase of revenue by 16.72%. Operating expenses have increased by 16.24%. The increase in revenue can be used to cover the operating expenses. There is also an increase in net profit after taxation of 525,389,120 taka i.e. 49.70%. It is concluded from the above analysis that there is sufficient progress in the performance of the bank and the overall profitability of the bank is good, since it has a good amount of net profit from the comparison. Interpretation: Comparative Balance Sheet 2013-14 The comparative balance sheet of the company reveals that during 2013 there has been an increase in assets of 17,896,437,826 i.e. 15.49%. Liabilities have relatively increased by 16,517,066,150, i.e. 15.34% and shareholder’s equity has increased by 1,379,371,676 or 17.54%.

(ii) The current assets have increased by Rs 152000 i.e. 26.67% and cash has increased by Rs 20,000. The current liabilities have increased only by Rs 20000 i.e. 12.9%. This further confirms that the company has used long-term finances even for the current assets resulting into an improvement in the liquidity position of the company. (iii) Reserves and surplus have decreased from Rs 330,000 to Rs 222,000 i.e. 32.73% which shows that the company has utilized reserves and surplus for the payment of dividends to shareholders either in cash or by way of bonus. (iv) The overall financial position of the company is satisfactory.

Interpretation : Comparative Income Statement 2014-15 Interpretation: The comparative income statement given above shows that there has been a decrease in interest income of -1.32%. Also the interest expenses have decreased by -8.93%. But there has been an increase of revenue by 16.72%. Operating expenses have increased by 16.24%. The increase in revenue can be used to cover the operating expenses. There is also an increase in net profit after taxation of 525,389,120 taka i.e. 49.70%. It is concluded from the above analysis that there is sufficient

progress in the performance of the bank and the overall profitability of the bank is good, since it has a good amount of net profit from the comparison. Interpretation: Comparative Balance Sheet 2014-15 The comparative balance sheet of the company reveals that during 2013 there has been an increase in assets of 17,896,437,826 i.e. 15.49%. Liabilities have relatively increased by 16,517,066,150, i.e. 15.34% and shareholder’s equity has increased by 1,379,371,676 or 17.54%. . (ii) The current assets have increased by Rs 152000 i.e. 26.67% and cash has increased by Rs 20,000. The current liabilities have increased only by Rs 20000 i.e. 12.9%. This further confirms that the company has used long-term finances even for the current assets resulting into an improvement in the liquidity position of the company. (iii) Reserves and surplus have decreased from Rs 330,000 to Rs 222,000 i.e. 32.73% which shows that the company has utilized reserves and surplus for the payment of dividends to shareholders either in cash or by way of bonus. (iv) The overall financial position of the company is satisfactory.

Interpretation : Comparative Income Statement 2012-13 Interpretation: The comparative income statement given above shows that there has been a decrease in interest income of -1.32%. Also the interest expenses have decreased by -8.93%. But there has been an increase of revenue by 16.72%. Operating expenses have increased by 16.24%. The increase in revenue can be used to cover the operating expenses. There is also an increase in net profit after taxation of 525,389,120 taka i.e. 49.70%. It is concluded from the above analysis that there is sufficient progress in the performance of the bank and the overall profitability of the bank is good, since it has a good amount of net profit from the comparison. Interpretation: Comparative Balance Sheet 2015-13 The comparative balance sheet of the company reveals that during 2013 there has been an increase in assets of 17,896,437,826 i.e. 15.49%. Liabilities have relatively increased by 16,517,066,150, i.e. 15.34% and shareholder’s equity has increased by 1,379,371,676 or 17.54%. . (ii) The current assets have increased by Rs 152000 i.e. 26.67% and cash has increased by Rs 20,000. The current liabilities have increased only

by Rs 20000 i.e. 12.9%. This further confirms that the company has used long-term finances even for the current assets resulting into an improvement in the liquidity position of the company. (iii) Reserves and surplus have decreased from Rs 330,000 to Rs 222,000 i.e. 32.73% which shows that the company has utilized reserves and surplus for the payment of dividends to shareholders either in cash or by way of bonus. (iv) The overall financial position of the company is satisfactory.

Interpretation : Comparative Income Statement 2012-13 Interpretation: The comparative income statement given above shows that there has been a decrease in interest income of -1.32%. Also the interest expenses have decreased by -8.93%. But there has been an increase of revenue by 16.72%. Operating expenses have increased by 16.24%. The increase in revenue can be used to cover the operating expenses. There is also an increase in net profit after taxation of 525,389,120 taka i.e. 49.70%. It is concluded from the above analysis that there is sufficient progress in the performance of the bank and the overall profitability of the bank is good, since it has a good amount of net profit from the comparison....