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

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Final Project Finance FIN 619

Final Project FINANCIAL STATEMENT ANALYSIS OF BANK AL FALAH

AND HABIB BANK LIMITED

A REPORT SUBMITTED TO THE DEPARTMENT OF MANAGEMENT SCIENCES, VIRTUAL UNIVERSITY OF PAKISTAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION

Submitted By

Mc070400479 Sheikh Waqas Ahmed

Department of Management Sciences, Virtual University of Pakistan 1 Sheikh Waqas Ahmed Mc070400479

Final Project Finance FIN 619

Dedication
I would like to dedicate this project to my parents who have always encourage me throughout in my academic career and make possible for me to stand where I am today.

2 Sheikh Waqas Ahmed Mc070400479

Final Project Finance FIN 619

Acknowledgement
In the name of ALLAH, the most kind and most merciful. First of all I m grateful to ALLAH ALMIGHTY, who bestowed me with health, abilities and guidance to complete the project in a successful manner, and without HIS help I was unable to perform this task. More than anybody else, I would like to acknowledge my project advisor, Dr. Muhammad Anwar for his never ending support and untiring efforts. He was always there to guide me whenever I felt stuck off and his encouragement always worked as moral booster for me. I have found him very helpful while discussing the tricky issues in this dissertation work. I would also like to thank Mr. Majid Hassan principal JMCIT Lahore. His critical comments on my work have certainly made me think of new ideas and techniques. I am thankful to all my class fellow specially Ambreen Fatima and all other friends who help me during the project when problem arises, specially my seniors Muhammad Yasir, Tanzila Riaz, Fatima and Saeed Mahmood for their kind help.

3 Sheikh Waqas Ahmed Mc070400479

Final Project Finance FIN 619

Executive Summary
Common Size Financial Statement discloses the internal structure of the firm. It indicates the existing relationship between sales and each income statement account. It shows the mix of assets that produce income and the mix of the sources of capital, whether by current or long-term debt or by equity funding. The primary objective of financial analysis is to forecast or determine the actual financial status and performance of a project

4 Sheikh Waqas Ahmed Mc070400479

Final Project Finance FIN 619

TABLE OF CONTENT

Section I
a) Introduction……………………………………………………. 1.1 Background ……………………………………………………….. 1.2 Introduction of the organization’s business sector ………………… 1.3 Company’s Introduction ………………………………….……….. Introduction of Habib Bank……………………………………. Introduction of Bank AL Falah………………………………... 1.4 List of competitors ………………………………………………… 1.5 Objectives of Projects………………………………….…………… 1.6 Significance of the Project………………………………………….

6
6 7 8 8 9 10 10 11 13 13 14 14 14 14 15

b) Processing and Analysis…………..…………………….……. Data Collection Sources……………………..………………………… Data Collection Tools………………………………………….……… Data Processing and Analysis…………………………….……………

Project proceedings………………………………………………. 1. Ratio Analysis…………………………………………….…………. a) Liquid Ratio…………………………………………………...

b) Leverage Ratio………………………………………………… 18 c) Profitability Ratio……………………………………………… 24 d) Activity Ratio………………………………….….………….. e) Market Ratios…………………………………………………. f) Statement of Cash Flow………………………………………. 2. Common Size Analysis……………………………………………… a) Horizontal Analysis…………..……………………….……… b) Vertical Analysis……………..……………………………… 5 Sheikh Waqas Ahmed Mc070400479 32 33 38 39 40 49

Final Project Finance FIN 619 3 Review of Descriptive Information………….……………………... 4 Comparisons ……………………………………………………….. b) Industry Averages and Comparisons with Competitors……… c) Summary……………………………………………………... d) Conclusions / Findings………………………………………. e) Recommendation ……………………………………………. 59 60 65 65 66 67

a) Trend Analysis………………………………………………… 60

Section II……………………………………………………………. 68 a) Introduction of the student……………………………………….LXVIII b)...
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