EXECUTIVE SUMMARY | 3| INDUSTRY BACKGROUND | 4| COMPANY PROFILE | 6| RATIO ANALYSIS | 8| ANALYSIS OF OPERATING ACTIVITIES | 9| ANALYSIS OF INVESTING ACTIVITIES | 11| ANALYSIS OF FINANCING ACTIVITIES | 13| COMMON SIZE ANALYSIS | 19| DEBT AND EQUITY FINANCING | 20| INDUSTRY STANDARDS | 22| FUTURE PROSPECTS | 23| CONCLUSION | 26| REFERENCES | 27| APPENDIX | 28|
The financial statement analysis of JP Morgan Chase and Citigroup has been conducted and compared with each other to understand how one is performing in relation to the other. Further, the two companies are also compared against the industry standards to know their positions. Since the two companies operate in the banking industry, they have similar components in their financial statements, which facilitate better comparison of their financial health. For the purposes of the analysis, we have considered the cash flow statements, balance sheet, income statement and the notes to the 10K. Further, the ratio analysis has also been conducted to assess its financial efficiency.
JP Morgan Chase used in approximately $3.752 billion cash in its operating activities while the Citigroup provided for $35.686 billion cash for its operating activities. In terms of the investing activities JP Morgan Chase had better cash flows as it provided for $54 billion in investing activities while the Citigroup provided for $43 billion in investing activities. As far as the financing activities are concerned, JP Morgan Chase used $49.2 billion and Citigroup used $77.4 billion. It is important to note that JP Morgan Chase paid a massive amount of dividends while Citigroup opted to reinvest in the retained earnings for future development.
Citigroup was ranked 9th in the EPS earnings while JP Morgan Chase was ranked 10th for its dividend yield when compared to the industry standards. However, Citigroup was ranked within the top 50 companies for majority of industry comparable ratios.
Industry comprises of banks that accept customer deposits and place them into interest bearing products like savings accounts and certificate of deposits, provide financial services to retail and business clients in the form of commercial, industrial and consumer loans and profits on the difference, and engage in investment banking activities such as equity and debt underwriting, asset management, investment advice, securities lending and financial advisory services such as mergers and acquisitions (M&As) and corporate finance.
In the commercial banking sector, Wells Fargo & Company ranks first with 11.9% market share followed by JP Morgan Chase & Co. with 9.6%, while Citigroup Inc. ranks fourth with 5.6% market share. All other financial institutions...