Analysis of Banking Competitors Financial Strengths and Weaknesses Essay Example
Analysis of Banking Competitors Financial Strengths and Weaknesses
Analysis of Banking Competitors Financial Strengths and Weaknesses Chase Bank Corporation, Wells Fargo Corporation, and Bank of America are three leading members of the banking industry. In analyzing Wells Fargo, Bank of America, and Chase we will consider the companies’ strengths and weaknesses over the past five years, to find the most financially strong company. We will be able to determine this through analyzing the following key ratios:
Growth Rates: • Sales (MRQ) vs. Qtr a 1 year ago • 5 Year Growth
Probability:
• Net Profit Margin (TTM) • Net Profit Margin – 5 Year Average
Management Effectiveness: • Return on Assets (TTM) • Return on Assets 5 year average Sales: Based on the financial comparison chart, attached in Appendix 1, the sales ratios show that all three banks are under performing in both sales and sales growth. However, of the three banks, Chase Bank is closest to reaching a positive number at 0.03% below most recent quarter industry standard of 12.58%. All three banks are under performing sales growth expectations. Sales Growth over the past five years demonstrates that all three banks have had some positive growth. Wells Fargo is the best performing of the three banks with a slim .29% above industry standard of 14.96%. While Bank of America is 9.77% below the industry standard five-year industry average. While Bank of America’s sales growths are nearly stagnating, what have hindered their sales have been the mounting lawsuits in excess of $9 billion. They also have the mounting debt from the acquisition of toxic loans from Countrywide exceeding $30 billion in mortgage debt. Analysis: The banking industry is suffering tremendously from the current economy. The mortgage industry’s downward slide is a large contributor to many of the economic issues currently present. The general population is wary of the banking
Analysis of Banking Competitors Financial Strengths and Weaknesses Chase Bank Corporation, Wells Fargo Corporation, and Bank of America are three leading members of the banking industry. In analyzing Wells Fargo, Bank of America, and Chase we will consider the companies’ strengths and weaknesses over the past five years, to find the most financially strong company. We will be able to determine this through analyzing the following key ratios:
Growth Rates: • Sales (MRQ) vs. Qtr a 1 year ago • 5 Year Growth
Probability:
• Net Profit Margin (TTM) • Net Profit Margin – 5 Year Average
Management Effectiveness: • Return on Assets (TTM) • Return on Assets 5 year average Sales: Based on the financial comparison chart, attached in Appendix 1, the sales ratios show that all three banks are under performing in both sales and sales growth. However, of the three banks, Chase Bank is closest to reaching a positive number at 0.03% below most recent quarter industry standard of 12.58%. All three banks are under performing sales growth expectations. Sales Growth over the past five years demonstrates that all three banks have had some positive growth. Wells Fargo is the best performing of the three banks with a slim .29% above industry standard of 14.96%. While Bank of America is 9.77% below the industry standard five-year industry average. While Bank of America’s sales growths are nearly stagnating, what have hindered their sales have been the mounting lawsuits in excess of $9 billion. They also have the mounting debt from the acquisition of toxic loans from Countrywide exceeding $30 billion in mortgage debt. Analysis: The banking industry is suffering tremendously from the current economy. The mortgage industry’s downward slide is a large contributor to many of the economic issues currently present. The general population is wary of the banking