Final Project Financial Statement Analysis of Bank Al Falah and Habib Bank Limited

The banking industry is highly competitive. The financial services industry has been around for hundreds of years. Wells Fargo has many competitors itself. In this paper, I will be doing a comparison of Wells Fargo & Company (WFC) and one of its biggest competitors, Bank of America Corporation (BAC). By analyzing looking at the financial ratios, one can see whether the company is successful or not. In the following, I will try to analyze and make a comparison of Wells Fargo’s and Bank of America’s recent performance in growth, income, and efficiency. Using a these criteria, I will determine which bank is the better buy according my analysis. My analysis of WFC & BAC’s performances

Financial ratio analysis is a valuable tool that allows one to assess the success, potential failure or future prospects of the company (Bazley 2012). The ratios are helpful in spotting useful trends that can indicate the warning signs of

Secondary information is collected for this case. This case study limited only one techniques of financial analysis that is Ratio Analysis and also taken a single company. Thus the conclusion of the analysis carried out in a professional manner will be able to correctly describe the evaluation of the company and to substantiate the user’s decisions.

The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future

Ratio analysis is a tool brought by individuals used to evaluate analysis of information in the financial statements of a business. The ratio analysis forms an essential part of the financial analysis which is a vital part in the business planning. There are 3 different ways of assessing businesses performance and these are: solvency, profitability and performance. Ratio analysis assists managers to work out the production of the company by figuring the profitability ratios. Also, the management can evaluate their revenues to check if their productivity. Thus, probability ratios are helpful to the company in evaluating its performance based on current earning. By measuring the solvency ratio, the companies are able to keep an

Ratio analysis shows the correlation within certain figures of financial statements, like current assets and current liability, and is used for three types of company needs- within, intra- and inter-company. Association can be shown in proportion, rate, or percentage and can evaluate company’s liquidity, profitability, and solvency. Liquidity ratios show company’s ability to pay obligations and fulfill needs for cash; profitability ratios show wellbeing and success for the certain time period; and solvency ratios show company’s endurance over the years.

Mafraq, J 2013, ‘The Role of Financial Analysis Ratio in Evaluating Performance’, Interdciplinary Journal of Contemporary Research in Business, vol. 5, no. 2, pp. 13-28.

The paper illustrates that financial ratio analysis is an important tool for firm’s to evaluate their financial health in order to identify areas of weakness so as to institute corrective measures.

This document is authorized for use only in Financial Management23 by Dr. Raj, at Institute of Management Technology - Dubai from January 2015 to July 2015.

Financial statements for banks have uniquely different analytical problem than statements for manufacturing, service and most companies in general. Therefore this analysis of JPMorgan and Chase 's financial statements requires a different approach in order to recognize the banks worth as an investment.

The long-term creditors and short term creditors are mainly concerned about the liquidity and solvency position of the company. The increase in the debt increases the debt equity ratio of the company. Generally less investor are interested in the company with high debt. If the liquidity position of the company is not proper then the creditors faces the risk of their dues being not paid. Therefore, ratio analysis plays an utmost important role in the performance evaluation of a company.

The primary measure used by regulators and analysts to measure a bank’s capital strength is the Tier 1 capital ratio. Analyzing this ratio indicates the strength and the bank’s ability to

Financial ratios are "just a convenient way to summarize large quantities of financial data and to compare firms' performance" (Brealey & Myer & Marcus, 2003, p. 450). Financial ratios are very useful tools in order to determine the health of a company, help managers to make decision, and help to compare companies that belong to the same industry in order to know about their performance.

BEING A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTING, FACULTY OF MANAGEMENT SCIENCES, UNIVERSITY OF ABUJA, ABUJA, NIGERIA

In the partial fulfillment of the requirement of Master of Business Administration (M.B.A.) Program (2002-2004) Hemchandracharya North Gujarat University, Patan.