Financial Analysis

Topics: Financial ratios, Financial ratio, Revenue Pages: 24 (7769 words) Published: December 1, 2012

It is always important to have good knowledge about financial condition of any company. It helps investor to come with best decision. Therefore, here I am going to analysis financial condition of two banks AB bank and National bank. I will do it in terms of its liquidity position, financial leverage, activity (efficiency), profitability and market position. My altimeter objective will be to find out how potential and existing investor perceives the performance and expected future investment of the bank.


Objective is the something that one's efforts or actions are intended to attain or accomplish. The objective of any financial institution including bank and nonblank bank is to maximize the shareholders wealth, which is indicated through the market value of the share. The performance of a bank depends on the objective of that bank. Some bank’s objective is to maintain liquidity while others bank’s objective is to earn higher yield. One bank may want to achieve short term goal while others may want to achieve long term goal. Only if the bank achieves its objective, we can say the bank is performing well. Here my objective is to fine out the performance of two banks and find out the best among two to invest. Therefore I am going to evaluate the performance of the AB Bank. Bangladesh. I analyze the performance of the bank in terms of its liquidity position, financial leverage, activity (efficiency), profitability and market position. I also go through five accounting period (2004-2008) of AB Bank limited, to analyze whether the performance of the bank is increasing or deteriorating over time. Moreover, performance also needs to compare with other bank to make best decision to invest.

Therefore my altimeter objective is to find out how potential and existing investor perceives the performance and expected future performance of the bank. To see the analysis of ratio calculation investor can make their investment decision. I also make advice whether potential investor will invest to AB Bank Ltd share and existing shareholder willingness to hold the share.

Initially I collected annual reports of AB bank ltd of five years (2004-2008) from its own website. After that I made a plan that which ratios I were going to make to evaluate performance of AB bank ltd. According to the plan I calculated all the ratios by taking require information from its financial reports. Almost all of those ratios were taught in our class; moreover I have collected some from internet. Moreover, performance ratios of National Bank LTD (NBL) were taken from my friend, who was working on that bank. After getting both the information and analysis I compared there performance. Finally, I end up by giving suggestion that which bank has poetical performance and good to invest.


Even though I tried my best to do the project as perfectly as possible, however I faced difficulty in some points because of several limitations. One of the biggest limitations was that I had to depend on other to get information about second bank’s performance evolution. Therefore, I could not work according to my plan. Secondly, all the information of financial reports was not arranged as the same way as I had seen in the book. Finally, it was very difficult to me to complete the whole project within very short period.

Overview of AB bank LTD

AB Bank Limited, the first private sector bank was incorporated in Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started its operation with effect from April 12, 1982. AB Bank is known as one of leading bank of the country since its commencement 27 years ago. It continues to remain updated with the latest products and services, considering consumer and client perspectives. AB Bank has thus been able to keep their consumer’s and client’s trust while upholding their reliability, across time.

During the last 27 years, AB Bank Limited has...
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