Hbl Ratio Analysis

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Table of Contents
1-Return on Equity:2
2-Return on Assets:3
3-Equity Multiplier:4
4-Asset Utilization Ratio:5
5-Tax Ratio:6
6-Efficiency Ratio:6
7-Expense Ratio:7
8-Spread:8
9-Burden:9

1-Return on Equity:

ROE = Net Income/Average Total Equity
YEAR| 2006| 2007| 2008|
Net Income| 12700315| 10084037| 15614020|
Average Total Equity| 38949430.5| 50120394.5| 63172013.5| | 0.032 | 0.020| 0.024|

Analysis: This trend of return of asset is similar to return on equity. Its basic reason is that the numerator that is net income is the same. The ROA has almost decreasing trend. In the year 2006 the ROA should decrease due to increase in denominator, contrary to this the ratio was decreased due to increase in Net income. Net Income = NII-Burden-PLL+SG-T

12700315 = 30481703 - (17326640-7269873) - 2804072 + 1219623 – 6140172

2-Return on Assets:
ROA = Net Income/Average Total Assets
YEAR| 2006| 2007| 2008|
Net Income| 12700315| 10084037| 15614020|
Average Total Assets| 559592686.5| 641141494.5| 724959955| | 2.27%| 1.57%| 2.15%|
 
Analysis: Return on assets decreased in 2007 and 2008 and it was maximum in 2006. This is because HBL used more debt financing in 2006 as compared to 2007 and 2008 which resulted in more interest cost and brought the Net income down.

3-Equity Multiplier:
EQ = Average Total Assets/ Average Total Equity
YEAR| 2006| 2007| 2008|
Average Total Assets| 559592686.5| 641141494.5| 724959955| Average Total Equity| 38949430.5| 50120394.5| 63172013.5| | 14.37| 12.88| 11.48|

Analysis: This decreasing trend shows that the dependence of banks on deposits was decreasing during the period.

4-Asset Utilization Ratio:
AU = Total Revenue/Average Total Assets
YEAR| 2006| 2007| 2008|
Total Revenue| 52175236| 60504185| 79683844|
Average Total Assets| 559592686.5| 641141494.5| 724959955| | 9.32%| 9.44%| 10.99%|

Analysis: The...
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