4.

2 Common Size Analysis of Balance Sheet

Common size analysis is an analysis of financial statements where the total assets divide all balance sheet items of asset side and all credit side balances divided by all liability items, and all income statement items are divided by net sales/revenues. Common size analyses are extremely helpful to highlight changes over the time in financial performance and financial conditions of the company. The table shows common size analysis of the balance sheets for the years 2010. The common size analysis given in the table shows that there have been improvements in the current assets in 2010 as compared to 2009, about 17%. But there has been decrease in fixed assets of about 16%. The main reason for this change is increase in short term investment showing a constant increase as a percentage to total assets. This implies that the bank is concentrating now more on non-interest income and the interest rates are constantly falling. Short-term advances have shown a significant change of 15% whereas total advances show a total change of only 6.4%. This is very significant to note that major decrease has occurred in long-term performing and non-performing advances. There is decrease in long term assets of about 17% which mainly cause the decrease in long term advances which are about 14% and 6% decrease in long term investment. On the liability side the total current liability has shown change of about 4%. The main reason for which is increase in current deposits, which are about 6%. The long-term liability of the organization is also decreased by 4%. The main reason for this is that fixed deposits of organization are decreased by 6%, which shows that there is a slight change in the organizations position by decrease in fixed deposits.

4.3 BALANCE SHEET

Assets Cash/Bal. With Banks Lending to F.Is Investment (ST) Advances-Performing (ST) Other Assets Total Current Assets Investment (LT) Advances-Performing (LT) Advances-Non performing (LT) Operating fixed Assets Deferred Tax Assets Total L.T Assets Total Assets Liabilities B/Payables Borrowings ST Deposits - Current Lease and Others Total Current Liabilities Fixed Deposits Other Long term Liabilities Total LT Liabilities Total Liability Shareholder's Equity Share Capital Reserves Accumulated Losses/Profits Minority Interest Surplus on revaluation Total 2008 4609108 4470006 9190440 49489469 8641264 97782157 19488141 28477494 11814855 2864018 8297500 70840998 168624155 1540592 4004140 102568752 8848842 116952416 48747422 21264841 49219400 166171716 22481680 4960454 -27282709 1168264 2124751 24541449 Rs in '000 2009 70464707 4627557 44884411 44642117 2641471 118177074 44624058 26424058 5749798 2841544 5026459 74644958 191821042 1847025 174544 118167469 9986608 140175645 44998916 5212755 49211671 179487406 5180000 4258947 -722487 1271700 2445466 12444726 2010 45591280 19050791 29580252 89292490 4509451 177024164 25007414 10412297 4671991 4884990 5486457 48464048 225487212 2991269 174544 152580240 5944744 161679785 47252204 10884720 48145924 209815709 5180000 4712569 454404 1412942 4811599 15571504

4.4 Common Size Analysis of Income Statement

The common size analysis of income statement is given in the table. Which shows that the UBL has been able to control its interest or mark up expense. As a result of decrease in mark up expense as a percentage of total revenues the gross profit margin has shown a trend of continuous increase. The increasing G/P Margin shows efficiency of the bank in controlling cost of sales (Markup expense) and better strategy of pricing, products and services. The provision for non-performing loans has a decreasing trend making no provision for non-performing loans and diminution in value of investment, which increases the profit of current year. The reduction in provision is a good sign, which shows that the bank is recovering its disbursed advances. It shows the good credit management of the bank. There is a great increase in non-markup income, which is about 24%. Among its individual components investment income has shown a large increase as a percentage of sales. Non markup expenses also show a rising trend in absolute amount though the common size in percentages have shown a mixed trend due to the changes in revenue figures. The nonperforming expanses also increased to about 25%, which is a very high percentage, but the other aspect of this is that it increased the efficiency and credit management of the staff. Like gross profit the net profit margin before tax has also increased with 24% rate. The extraordinary item expanse has not occurred in 2010 that caused a slight increase in the net income. The tax expanse is increased about 7% because of the increase in profit. Loss brought forward from previous year is reduced by 14%. The common size analysis of the UBL is clearly showing that the bank has shown a lot of improvement in its performance. The organization shows profit for the first time in the last 5 years which is a positive sign and it will build up the moral of the

INCOME STATEMENT
ITEMS Mark up revenue mark up expense gross profit Provisions and B/Debts Net Mark up Income Non Mark up Return Commission & Brokrage Dividends/Exchange and Others Total Non Mark up Income Total Income Non Mark Up Expense Administrative Other Provision and Charges Total non mark up Expenses Profit Before Extraordinary Items Extraordinary Items Profits before tax Taxation Profit/Loss after tax Share of Minority Interest Accumulated Loss Brought Frd. Adjustment against sh. Capital Appropriation and Transfers Surplus on revaluation of Assets Transfer to Statutory Reserve Accumulated Loss Brought Frd. 2008 11468 6447 5121 1264 4858 1097 1818 2915 6774 4669 642 5401 1472 -7200 -5728 1749 -7467 6 19821 0 0 2 27284 Rs in Millions 2009 2010 11485 9269 5476 1941 5909 7448 746 564 5164 6774 2010 1514 4522 8686 5879 51 5940 2756 25 2781 1419 1462 10 27284 25202 248 442 722 2142 2804 4945 11718 6649 556 7197 4521 0 4521 1704 2818 21 722

527 454