Professional Documents
Culture Documents
Zahid Javaid
Cell # 03454399350
MBA
Finance
Financial Statement Analysis of
&
Introduction of the Project
• This project is about the comparison of performance through
financial statements analysis of Faysal Bank Ltd. & Meezan Bank
Ltd will make me able to evaluate strategies of these organizations.
• The accurate and sound financial statement analysis is one the most
important and core element of fundamental analysis, which include
ratio, horizontal, vertical, and trend & industry analysis
Objectives
• The aim of this project is to provide complete knowledge and
general idea about the financial system of Banks.
1.Current Ratio
2.Sales to Working Capital
3.Working Capital
Current Ratio:
• The current ratio highlights Faysal Bank Meezan Bank
the firm ability to cover short
term liabilities with its current Particulars 2007 2008 2009 2007 2008 2009
assets. Current
Assets
138,762,4
62
135,594,
508
176,797,8
78
66,145,5
96
83,395,5
55
121,561,1
87
• Current Ratio = Current Current 58,877,32 65,763,5 108,009,0 36,967,0 51,844,2 77,699,05
Liabilities 0 83 79 02 28 8
Assets / Current Liabilities
Current
• Interpretation: Ratio 2.36 2.06 1.64 1.79 1.61 1.56
Working
• Interpretation:
79,885, 69,830, 68,788, 29,178, 31,551, 43,862,
Capital 142 925 799 594 327 129
Sales To
• The average turnover in working Working
Capital 0.15 0.19 0.25 0.16 0.22 0.23
capital of Faysal Bank is 19% &
Meezan Bank have 20% this Sales To Working Capital Ratio
Current
and Current Liabilities. Assets
138,762,
462
135,594,
508
176,797,
878
66,145,
596
83,395,
555
121,561,
187
• Interpretation:
Current 58,877,3 65,763,5 108,009, 36,967, 51,844, 77,699,0
Liabilities 20 83 079 002 228 58
Working
• The working capital ratio of
7988514 6983092 6878879 291785 315513 4386212
Capital 2 5 9 94 27 9
Mezaan Bank
40000000.00
0.00
2007 2008 2009
Leverage Ratios
• The leverage ratios highlights the organization methods of
finance as well provide the sketch how well firm have ability to
meet its financial obligations. Leverage Ratios include the
combinations of debts, assets, equity, & interest expense.
The leverage ratios include:
• Time Interest Earned
• Fixed Charges Coverage Ratio
• Debt Ratio
• Debt to Equity Ratio
• Current Worth / Net worth Ratio
• Total Capitalization Ratio
• Long Term asset to equity capital ratio
• Long term Assets versus Long term Debt
• Debt Coverage Ratio
TIE Ratio = EBIT / Interest Charges
before the firm is unable to meet its T.I.E Ratio 1.4 1.2 1.1 1.5 1.3 1.4
current liability.
Fixed Charges Coverage Ratio
• Fixed Charges Coverage Faysal Bank Meezan Bank
10,1
2008
10,2
2009
13,2
2007
3,72
2008
4,08
2009
6,70
• Interpretation: 1.60
1.52
1.36 1.35
• Meezan Bank has high 1.40
1.20
1.21
1.32
1.11
compares the total debt of Particulars 2007 2008 2009 2007 2008 2009
company with its total Total Debt
125,120,
918
127,469,
378
168,082,
674
61,471,
903
79,301,
092
114,997,
275
assets, generally called the
Total
debt ratio Assets
141,277,
421
138,241,
486
180,865,
413
67,178,
559
85,276,
070
124,181,
734
• Interpretation:
Debt
• The debt ratio of Faysal and Ratio 0.89 0.92 0.93 0.92 0.93 0.93
Mezaan Bank
6.00
4.00
high leverage of banks 2.00
0.00
2007 2008 2009
Current Worth to Net worth Ratio = Current
Worth / Net worth Ratio
Assets – Total Current Liabilities Particulars 2007 2008 2009 2007 2008 2009
2.00
1.00
0.00
2007 2008 2009
Total Capitalization Ratio = Long term debt /
long term debt + shareholders' equity
• Interpretation: Particulars
Faysal Bank
shows that this ratio of Long Term Debt+ Shares 82,400, 72,477, 72,856, 8,301, 19,512, 16,172,
holders equity 101 903 334 239 487 655
Faysal Bank is higher then
Meezan Bank. Total Capitalization Ratio 0.80 0.85 0.82 0.31 0.69 0.43
1.00 0.85
0.80 0.82
0.80 0.69
0.43
Mezaan Bank
0.40 0.31
0.20
0.00
2007 2008 2009
Long Term asset equity capital ratio =
Long Term Assets
Equity Capital
• This ratio shows the ability Faysal Bank Meezan Bank
to meet the long term debts Particulars 2007 2008 2009 2007 2008 2009
Interpretation: Assets
Equity
2,514,959
125,120,9
2,646,978
127,469,3
4,067,535
168,082,6
3
61,471,9
5
79,301,0
2,620,547
114,997,2
Capital 18 78 74 03 92 75
Mezaan Bank
0.20 0.14
0.10 0.07
0.04 0.04
0.00
2007 2008 2009
Debt Coverage Ratio = Net Operating
Income / Total Debt
of company to measures to the Particulars 2007 2008 2009 2007 2008 2009
Mezaan Bank
0.04
0.02
0.00
2007 2008 2009
Profitability Ratios
the how much amount Particulars 2007 2008 2009 2007 2008 2009
project.
• Interpretation: Return
Assets
On
1.77 0.8 0.75 1.7 0.81 0.98
The above calculations shows the
after 2007 this ratio decreased Return On Assets Ratio
specially the ratio of Faysal bank
continuous decreases in the 3
years while Meezan Bank took 2.00 1.77 1.70
come back after huge decreasing 1.50
in the year of 2008. 0.98
Faysal Bank
Ratio
0.50
0.00
2007 2008 2009
DuPont Return on Assets =
Profit after taxation x 100
Total Assets
Faysal Bank Meezan Bank
• This ratio determine the impact of
Particulars 2007 2008 2009 2007 2008 2009
assets turnover on the on the
2,272,1 1,114,9 1,200,1 963,50 621,18 1,025,3
profit margin. Profit After Tax 08 52 59 1 7 51
0.50
ratio shows the company 2007 2008 2009 2007 2008 2009
Operating
operating income by its own Income 10,157,219 10,251,292
13,268,38
6 3,721,156 4,080,645 6,709,639
operation. 16,957,87
Sales 11,610,781 13,404,132 5 4,573,752 6,803,213 10,102,060
• Interpretation: Operating
Income
Margin
• The Faysal bank operating 87.48 76.48 78.24 81.36 59.98 66.42
Mezaan Bank
40.00
20.00
0.00
2007 2008 2009
Operating Assets Turnover =
Operating Assets x 100
Net Sales
Faysal Bank Meezan Bank
Operating Assets
Turnover 112.79 92.89 69.13 227.53 132.13 159.02
250.00 227.53
200.00
159.02
132.13 Faysal Bank
150.00
Ratio
112.79
92.89 Mezaan Bank
100.00 69.13
50.00
0.00
2007 2008 2009
Return on Operating Assets
= Profit after Taxation x 100
Operating assets
Faysal Bank Meezan Bank
• The return of operating assets
ratio use to determine activity of Particulars 2007 2008 2009 2007 2008 2009
those assets, which utilize to 2,272,10 1,114,95 1,200,15 621,18 1,025,
generate the revenue. This ratio Net Profit After Tax 8 2 9 963,501 7 1
gives us the result of the ongoing 13,095,4 12,451,2 11,723,6 10,406,5 8,989,1 16,064
Operating Assets
campaign to eliminate 42 82 14 40 99 74
8.95
10.00 Mezaan Bank
its operating assets. 5.00
6.91 6.38
0.00
2007 2008 2009
Sales to Fixed Assets = Net Sales / Fixed
Assets
• This ratio is indicates that how Faysal Bank Meezan Bank
much sales are contributed by Particulars 2007 2008 2009 2007 2008 2009
investment in fixed Assets. 11,610,7 13,404,1 16,957,8 4,573,7 6,803,2 10,102,0
Net Sales 81 32 75 52 13 60
• Interpretation: Long
Assets
Term 2,514,95
9
2,646,97
8
4,067,53
5
1,032,9
63
1,880,5
15
2,620,54
7
assets in is higher of
Faysal Bank as compare 6.00
5.00 4.62 4.43
5.06
4.17
3.85
to Meezan Bank 4.00 3.62
Faysal Bank
Ratio
Limited. 2.00
1.00
0.00
2007 2008 2009
Return on Total Equity =
Profit after taxation x 100
Total Equity
• Return on Equity measures the Faysal Bank Meezan Bank
amount of Net Income earned by
Particulars 2007 2008 2009 2007 2008 2009
utilizing money of Total common
equity. It is the most important of Profit After Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351
The net profit margin falls down Sales 11,610,781 13,404,132 16,957,875 4,573,752 6,803,213 10,102,060
25.00
21.07
19.57
20.00
Faysal Bank
15.00
Ratio
5.00
0.00
2007 2008 2009
Activity Ratios
Mezaan Bank
1.00
1.34 1.25 1.43
0.00
0.00
2007 2008 2009
Earning Per Share =
Profit after Taxation
Number of Shares
• Interpretation: Faysal Bank Meezan Bank
No. Of
Meezan Bank in 2007 as Shares 529,629 609,091 609,091 492,596 509,005 599,185
well the average EPS also E.P.S 4.29 1.83 1.97 1.96 1.22 1.71
5.00 4.29
4.00
Faysal Bank
3.00
Ratio
Mezaan Bank
1.96 1.83 1.97 1.71
2.00 1.22
1.00
0.00
2007 2008 2009
Price / Earning Ratio =
Stock Price Per Share
Earning Per Shares
• Interpretation: Faysal Bank Meezan Bank
10.00
4.52
5.00 3.44
0.00
2007 2008 2009
Dividend Payout Ratio =
Dividend per Share
Earning per Share
• The dividend payout ratio is an
Faysal Bank Meezan Bank
indicator of how well earnings
support the dividend payment. Particulars 2007 2008 2009 2007 2008 2009
Dividend Per
• Interpretation: Share 1.34 1.43 0 1.25 4.48 2.88
Earning Per
• The dividend payout ratio of Share 4.29 1.83 1.97 1.96 1.22 1.71
Dividend Pay
Meezan Bank is higher then Out 0.31 0.78 0 0.64 3.67 1.68
2.00 1.68
0.64 0.78
1.00
0.31
0.00
0.00
2007 2008 2009
Dividend Yield = Dividend per Share
Share Price
compare to Faysal
Bank in last three Dividend Yield Ratio
years. 0.50
0.40
0.45
Faysal Bank
0.29
0.30 Mezaan Bank
Ratio
0.10
0.00
0.00
2007 2008 2009
Book Value per Share =
Shareholders’ Equity
Share Capital
• The book value per share Faysal Bank Meezan Bank
defined as the common Particulars 2007 2008 2009 2007 2008 2009
fiscal quarter. Comparing Share 3.05 2.03 2.1 1.51 1.29 1.37
0.06
0.06 0.04
0.04
0.01
0.02
0.00
2007 2008 2009
Operating Cash Flow per Share =
Operating cash flow / Total Shares
• Operating Cash Flow per Faysal Bank Meezan Bank
Share: Particulars 2007 2008 2009 2007 2008 2009
• This ratio guide to measure the Operating Cash 7,280,5 1,907,3 13,981,4 7,465,0 3,320,1 13,966,3
Flow
company financial strength. This 85 27 49 00 90 50
492,59 509,00
ratio can be calculated operating Total Shares 529,629 609,091 609,091 6 5 599,185
10.00 6.52
5.00 3.13
0.00
2007 2008 2009
Horizontal Analysis
• When an analyst compares financial information for two or more years for
a single company, the process is referred to as horizontal analysis, since
the analyst is reading across the page to compare any single line item.
Methods of financial statement analysis generally involve comparing
certain information. It is a procedure in fundamental analysis in which is
an analyst compares ratios or line items in a company's financial statements
over a certain period of time. The analyst will use his judgment when
choosing a particular timeline; however, the decision is often based on the
investing time horizon under consideration.
Income Statement Of Meezan Bank Limited
Horizontal Analysis
Description 2007 2008 2009 2007 2008 2009
Rs.In ,000 Rs.In ,000
Profit / return earned on
financings, investments and
placements 4,573,752 6,803,213 10,102,060 100 148.74 220.87
Return on deposits and other dues
expensed 2,451,968 3,088,334 4,969,916 100 125.95 202.69
Net spread earned 2,121,784 3,714,879 5,132,144 100 175.08 241.88
Provision against non-performing
financings (net) 435,018 428,436 1,430,536 100 98.49 328.85
Provision for diminution in value
of investments and impairment 878 288,884 88,640 100 32,902.51 10,095.67
Bad debts written off directly - - - - - -
435,896 717,320 1,519,176 100 164.56 348.52
Net spread after provisions 1,685,888 2,997,559 3,612,968 100 177.80 214.31
OTHER INCOME
Fee, commission and brokerage
income 321,685 431,725 529,260 100 134.21 164.53
Dividend income 104,345 243,585 189,973 100 233.44 182.06
Income from dealing in foreign
currencies 392,319 304,692 752,904 100 77.66 191.91
Capital gain / (loss) on sale of
investments - net 533,093 47,001 76,160 100 8.82 14.29
Unrealised loss on held for
Impairment on reclassification of
securities from held for trading to
available for sale securities - (362,751) - - #DIV/0! -
Other income 27,904 66,670 49,507 100 238.93 177.42
Total other income 1,347,893 707,908 1,597,804 100 52.52 118.54
3,033,781 3,705,467 5,210,772 100 122.14 171.76
OTHER EXPENSES
Administrative expenses 1,755,761 2,626,606 3,530,161 100 149.60 201.06
Other provisions / write offs 5,948 86,263 (60,859) 100 1,450.29 (1,023.18)
Other charges 2,884 287 1,747 100 9.95 60.58
Total other expenses 1,764,593 2,713,156 3,471,049 100 153.76 196.71
1,269,188 992,311 1,739,723 100 78.18 137.07
Extraordinary / unusual items - - -
PROFIT BEFORE TAXATION 1,269,188 992,311 1,739,723 100 78.18 137.07
Taxation - Current 271,452 314,790 1,440,374 100 115.97 530.62
Prior years - - - - - -
Horizontal Analysis
2007 2008 2009 2007 2008 2009
ASSETS Rs.In ,000 Rs.In ,000
Cash and balances with treasury
banks 5,644,028 5,763,710 8,387,432 100 102.12 148.61
Balances with other banks 3,729,549 1,344,974 5,260,467 100 36.06 141.05
Due from financial institutions 8,850,000 18,108,000 34,499,500 100 204.61 389.82
Investments 10,535,186 14,286,949 23,290,309 100 135.61 221.07
Financings 34,576,339 39,768,481 44,188,066 100 115.02 127.80
Operating fixed assets 1,032,963 1,880,515 2,416,375 100 182.05 233.93
Deferred tax asset - - 204,172 - - #DIV/0!
Other assets 2,810,494 4,123,441 5,935,413 100 146.72 211.19
67,178,559 85,276,070 124,181,734 100 126.94 184.85
LIABILITIES
Bills payable 1,192,160 1,057,017 1,249,210 100 88.66 104.79
Due to financial institutions 2,415,606 4,008,496 8,468,425 100 165.94 350.57
Deposits and other accounts 54,582,353 70,233,875 100,333,051 100 128.68 183.82
Sub-ordinate loan - - - - - -
Liabilities against assets subject
to finance leases - - - - - -
Deferred tax liabilities 430,377 453,038 - 100 105.27 -
Other liabilities 2,851,407 3,548,666 4,946,589 100 124.45 173.48
61,471,903 79,301,092 114,997,275 100 129.00 187.07
REPRESENTED BY
Share capital 3,779,897 4,925,961 6,650,048 100 130.32 175.93
Reserves 720,785 845,022 1,050,092 100 117.24 145.69
Unappropriated profit 1,219,228 570,114 1,390,395 100 46.76 114.04
5,719,910 6,341,097 9,090,535 100 110.86 158.93
Deficit on revaluation of
investments (13,254) (366,119) 93,924 100 2,762.33 (708.65)
5,706,656 5,974,978 9,184,459 100 104.70 160.94
Cash Flow Statement Meezan Bank Limited
2007 2008 2009 2007 2008 2009
CASH FLOW FROM
OPERATING ACTIVITIES Rs.In ,000 Horizontal Analysis
Profit before taxation 1,269,188 992,311 1,739,723 100 78.18 137.07
Dividend income (104,345) (243,585) (189,973) 100 233.44 182.06
1,164,843 748,726 1,549,750 100 64.28 133.04
Adjustments for non-cash
charges
Depreciation 124,420 210,095 307,438 100 168.86 247.10
Amortisation 14,282 21,909 31,853 100 153.40 223.03
Provision against non-performing
financings (net) 435,018 428,436 1,430,536 100 98.49 328.85
Provision for diminution in the
value of investments on associates -
listed - 287,046 - - - -
on associates - unlisted 878 1,838 - 100 209.34 -
on others - - 88,640 - - 100.00
Loss on reclassification of
securities from held for trading to
available for sale securities - 362,751 - - - -
Gain on sale of fixed assets (6,173) (12,744) (13,123) 100 206.45 212.59
Gain on securities with deferred
purchase commitments - (23,014) - - 100.00 -
Unrealised loss on held for trading
investments 31,453 23,014 - 100 73.17 -
599,878 1,299,331 1,845,344 100 216.60 307.62
(Increase) / decrease in operating assets
Due from financial institutions (5,150,000) (9,258,000) (16,391,500) 100 179.77 318.28
Held for trading securities (121,122) (51,142) 151,096 100 42.22 (124.75)
Deposits and other accounts 20,132,912 15,651,522 30,099,176 100 77.74 149.50
Net cash flow from operating activities 7,465,000 3,320,190 13,966,350 100 44.48 187.09
CASH FLOW FROM INVESTING ACTIVITIES
Net investments in held to maturity securities (300,652) (114,129) 568,481 100 37.96 (189.08)
available for sale securities (6,313,829) (4,196,312) (9,042,992) 100 66.46 143.23
Investments in operating fixed assets (643,739) (1,096,419) (892,838) 100 170.32 138.70
Net cash flow from investing activities (8,123,692) (5,585,079) (9,151,222) 100 68.75 112.65
Net increase / (decrease) in cash and cash equivalents (658,692) (2,264,893) 6,539,215 100 343.85 (992.76)
Cash and cash equivalents as at January 1 10,032,269 9,373,577 7,108,684 100 93.43 70.86
Cash and cash equivalents as at December 31 9,373,577 7,108,684 13,647,899 100 75.84 145.60
Income Statement Faysal Bank Limited
Horizontal Analysis
Description 2007 2008 2009 2007 2008 2009
Rs.In ,000
11,610,781 13,404,132 16,957,875 100 115.45 146.05
Mark-up / return / interest
earned 7,459,392 8,454,755 11,967,885 100 113.34 160.44
Mark-up / return / interest
expensed 4,151,389 4,949,377 4,989,990 100 119.22 120.20
Net mark-up / interest income 1,797,432 1,561,016 1,966,414 100 86.85 109.40
Provision against non-
performing loans and advances 74,537 (104,822) (26,723) 100 (140.63) (35.85)
(Reversal) / Provision for
consumer loans - general 207,075 591,168 252,192 100 285.48 121.79
Provision for diminution in the
value of investments Bad debts
written off directly - - - - - -
Grand Total 2,079,044 2,047,362 2,191,883 100 98.48 105.43
Net mark-up / interest income
after provisions 2,072,345 2,902,015 2,798,107 100 140.04 135.02
Non mark-up / interest income
Fee, commission and brokerage
income 743,913 814,001 885,124 100 109.42 118.98
Dividend income 1,221,217 1,207,366 667,926 100 98.87 54.69
Income from dealing in foreign
currencies 313,597 347,114 400,477 100 110.69 127.70
(Loss) / Gain on sale of securities 1,115,613 (133,881) 824,621 100 (12.00) 73.92
Total non mark-up / interest income 3,441,145 2,310,593 2,813,065 100 67.15 81.75
REPRESENTED BY
Surplus on revaluation of
assets 5,811,357 636,121 1,446,593 100 10.95 24.89
Borrowings from financial institutions (4,969,182) 3,031,613 21,958,298 100 (61.01) (441.89)
Deposits 27,684,965 713,229 20,878,395 100 2.58 75.41
Other liabilities 1,793,903 (228,085) 132,746 100 (12.71) 7.40
22,400,488 2,646,347 42,898,373 100 11.81 191.51
7,534,997 2,247,982 17,759,264 100 29.83 235.69
Income tax paid (254,412) (340,655) (3,777,815) 100 133.90 1,484.92
Net cash flow from operating activities 7,280,585 1,907,327 13,981,449 100 26.20 192.04
CASH FLOW FROM INVESTING
ACTIVITIES
Sale proceeds from disposal of fixed assets 23,378 42,304 36,843 100 180.96 157.60
Net cash flow from investing activities (5,499,096) (2,687,468) (14,633,913) 100 48.87 266.11
CASH FLOW FROM FINANCING
ACTIVITIES
Net cash used in financing activities (841,889) (1,331,842) (4,865) 100 158.20 0.58
(Decrease) / Increase in cash and cash equivalents 939,600 (2,111,983) (657,329) 100 (224.77) (69.96)
Cash and cash equivalents at end of the year 11,380,486 9,804,304 9,235,997 100 86.15 81.16
Vertical Analysis
• The term of vertical analysis use to calculates each item on a
single financial statement as a percentage of a total. This term
applies because each year's figures are listed vertically on a
financial statement. The total used by the analyst on the income
statement is net sales revenue, while on the balance sheet it is
total assets. This approach to financial statement analysis, also
known as component percentages, produces common-size
financial statements. Common-size balance sheets and income
statements can be more easily compared, whether across the
years for a single company or across different company’s
financial statement item that is used as a base value. For
example in the income statement, 100% is assigned to net sales
with all revenue and expense accounts related to it. Under
vertical analysis, the statements showing the percentages are
referred to as Common Size Financial Statements. In the
balance sheet, the total assets equal 100%. Each asset is stated
as a percentage of total assets. Similarly, total liabilities and
stockholders' equity are assigned 100% with a given liability or
equity account stated as a percentage of the total liabilities and
stockholders' equity.
Profit and Loss Account Meezan Bank Limited
2007 2008 2009 2007 2008 2009
REPRESENTED BY
Deficit on revaluation of
investments (13,254) (366,119) 93,924 (0.0) (0.4) 0.1
2.50 2.23
1.94
2.00 FBL
1.63 1.57
1.48 MBL
R a t io
1.50
ABL
1.00
BA FL
0.50 BIPL
0.00
1
Three Years Average Working Capital
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Working Capital of FBL, MBL, ABL, BAFL & BIPL
140000000.00
120000000.00 FBL
100000000.00 MBL
Ratio
80000000.00
ABL
60000000.00
40000000.00 BAFL
20000000.00 BIPL
0.00
1
Three Years Average Sales To Working
Capital of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Sales To Working Capital of FBL, MBL, ABL, BAFL & BIPL
Sales To Working
Capital 0.19 0.21 0.27 0.25 0.13
0.30 0.27
0.25
FBL
0.25 0.21
0.19
0.20 MBL
R a t io
0.13
0.15 A BL
0.10 BA FL
0.05
BIPL
0.00
1
Three Years Average Debt Ratio
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Debt Ratio of FBL, MBL, ABL, BAFL & BIPL
1.00
0.95 0.95
0.95 0.91 0.92 FBL
0.90 MBL
R a t io
0.85 0.80 A BL
0.80 BA FL
0.75 BIPL
0.70
1
Three Years Average Current To Net Worth
Ratio of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Current To Net Worth Ratio of FBL, MBL, ABL, BAFL &
BIPL
8.00 6.71
5.50 5.83 FBL
6.00 5.01
MBL
R a t io
4.00 A BL
2.47
BA FL
2.00
BIPL
0.00
1
Three Years Average Gross Profit Ratio
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Gross Profit Ratio of FBL, MBL, ABL, BAFL & BIPL
60.00 51.07
46.40 47.11
50.00 FBL
33.57
R a t io
2.00 1.55
1.00 0.94 FBL
1.00 0.50
MBL
R a t io
0.00 A BL
1 BA FL
-1.00
BIPL
-1.30
-2.00
Three Years Average Net Profit Margin
Ratio of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Net Profit Margin Ratio of FBL, MBL, ABL, BAFL & BIPL
30.00
18.18
20.00 12.15 FBL
10.93
10.00 5.77
MBL
R a t io
0.00 A BL
-10.00 1 BA FL
-20.00 BIPL
-20.90
-30.00
Conclusion/Findings
• Liquidity position of Faysal Bank Limited is higher then
Meezan Bank Limited this indicates that Meezan Bank
Limited has higher leverage. Both financial institutes should
improve their current ratio & working capital position in
financial year 2009. The analysis shows that its lower down
gradually.
• Net profit margin of Meezan Bank Limited is higher then
Faysal Bank Limited.
• Gross profit margin of Meezan Bank Limited is higher then
Faysal Bank Limited so I would like to suggest Faysal Bank
should improve its Gross Profit margin to meet the expenses
efficiently and set a sight profit for shares holders.
Conclusion/Findings
The Operating income margin of Faysal Bank Limited is higher
then Meezan Bank Limited which indicates that Faysal Bank
Limited generates higher income by its own operation as compare
to Meezan Bank Limited.
The Long Term debt to long term liabilities ratio of Meezan Bank
Limited is higher then Faysal Bank Limited because Faysal bank
limited employed its funds in short term activities more then
Meezan Bank Limited
Meezan Bank Limited has a good market perception due to
continuous declaration of dividends but on the other hand Faysal
Bank limited did not declared dividend in financial year 2009.
The three years average price / earning ratio of Meezan Bank
Limited 13.97 while the Faysal Bank Limited has 7.78 % this
indicates the Meezan Bank Limited has much potential in stock as
compare to Faysal Bank Limited.
The operating cash flow to total debt ratio of Meezan
Bank Limited is little higher then Faysal Bank Limited
Recommendations
With the assistance analyses of financial reports I would like to
recommend both financial institutes should over come their pit
falls, flaws and deficiencies. Meezan Bank limited should improve
its current ratio. The Meezan Bank Limited Net Profit Margin is
higher then Faysal Bank Limited. The Faysal Bank Limited should
improve its profitability ratio by efficiently use its resources.
Similarly the price earning ratio & dividend payout ratio of Meezan
Bank Limited is higher then Faysal Bank this highlights good
return on investment as well good market perception. Faysal should
also pay dividend consistently through generate the profit by
improving its operation. I would also like to recommend that
financial institute should much promote the business activities and
provide financial assistance to industry which will be reduce the un
employment, inflation and increase productivity of Pakistan
Thank You