Ratio MCB Bank

7/30/2019 Ratio MCB Bank

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Sonia Anis

mc090205046 MBA

Finance





Introduction to MCB

A bank is a financial institution which

deals with money and credit. It is anintermediate between two parties. A

bank is a firm that takes deposits from

household, firms and makes loans to

household and firms.



History

Muslim Commercial Bank Ltd. Unfold 57- years’

growth. MCB is not an overnight success story. The

bank started corporate life in Calcutta on July 9,

1947. After the partition of the Indo-Pak

Subcontinent, the bank moved to Dhaka from where it

commenced business in August 1948. In 1956, the

Bank transferred it Registered office to Karachi,where the Head Office is presently located. Main

Muhammad Mansha Chairman and chief executive of

MCB



P

oAuto Loan

oBusinessSarmaya

oTractor finance

scheme

oMORTGAGE

S

oMCB ATM

ServicesoMCB Mobile

Banking

oMCB Call

Center

oBasic Banking

Account (BBA)oCurrent Account

oSaving Account

oBusiness

Account

D



Allied Bank Limited

United Bank Limited

Askari Bank Limited

Add Your

Title



6500 6500 6500

292,098 330,274 367,604

218,960 262,510 253,149

113,089 96,256 167,134

394,068 22,663 44,662

5,130 9,193 15,779

15,265 15,374 15,495

2007 2008 2009

Authorize

capital

Deposits

Advances

Investment

Borrowing

Reserve

Profit after tax

Description



Organizational Hierarchy Chart

President

Chairman

Vice president

Chief Financial Advisor

Audit Committee

Regional Manager

Branch Manager

Senior Vice President



15-10-2010 30-11-2010

Joining Adjoining



Working Departments

Remittance

1st week

2nd week

3rd week

Customer service

Account

4th week

5th week

6th week Collect External information

Cash

ClearingDepartme

nt



Activity

Leverage

Liquidity

Ratios

MarketProfitability





Current Ratio

Ratio

Analysis

Muslim Commercial Bank Limited Current Ratio = Current assets

Current Liability

2007 2008 2009

Current

Ratio

62411535/22201551

2.81

67584827/31897249

2.11

70824959/24020172

2.94

2.94

2.11

2.81

0 0.5 1 1.5 2 2.5 3 3.5

2 0 0 7

2 0 0 8

2 0 0 9



Quick Ratio (Acid Test)

Ratio

Analysis

Muslim Commercial Bank Limited

Current Ratio = Current assets- prepaid Expenses

Current Liability

2007 2008 2009

Quick Ratio 62411535/22201551

2.81

67584827/31897249

2.11

70824959/24020172

2.94

2.94

2.11

2.81

0 0.5 1 1.5 2 2.5 3 3.5

2 0 0 7

2 0 0 8

2 0 0 9



Working Capital Ratio

Ratio

Analysis


Working Capital ratio = Current Assets - Current Liability

2007 2008 2009 Working

Capital

Ratio

62411535-22201551

40209984

67584827-31897249

35687578

70824959-24020172

46804787

Working Capital Ratio

40209984

35687578

46804787

2 0 0 7

2 0 0 8

2 0 0 9



Working of Current Assets

Current Assets2007

(Rs)

2008

(Rs)

2009

(Rs)

Cash and balances

with treasury banks

39683883 39,631,172 38,774,871

Balances with other

banks

3807519 4,043,100 6,009,993

Landings to

financial institutions

1051372 4,100,079 3,000,000

Other assets – net 17868761 19,810,476 23,040,095

Total 62411535 67584827 70824959



Working of Current Liabilities

Current Liabilities 2007

(Rs)

2008

(Rs)

2009

(Rs)

Bills payable 10479058 10,551,468 8,201,090

Other liability 11722493 21,345,781 15,819,082

Total 22201551 31897249 24020172





Debt Ratio

Ratio

Analysis

Muslim Commercial Bank Limited Debt Ratio = Total Debt / Total Assets

2007

2008

2009

Debt

Ratio

355365842/410485517

0.86

385179850 /443615904

0.868

439483714/509,223,727

0.86

Debt Ratio

0.86

0.86

0.86

0 0.2 0.4 0.6 0.8 1

2 0 0 7

2 0 0 8

2 0 0 9



Working of Total (Liability) Debt

Total debt 2007

(Rs)

2008

(Rs)

2009

(Rs)

Bills payable 10479058 10,551,468 8,201,090

Borrowing 39406831 22,663,840 44,662,088

Deposit and

other account292098066 330,181,624 367,604,711

Other liability 11722493 21,345,781 15,819,082

Deferred tax

liabilities – net

1180162 437,137 3,196,743

Sub-ordinate

loan479232 - -

Total 355365842 385,179,850 439,483,714



Working of Total Assets

Total Assets 2007

(Rs)

2008

(Rs)

2009

(Rs)

Cash and balances with

treasury banks

39683883 39,631,172 38,774,871

Balances with other banks 3807519 4,043,100 6,009,993Lending to financial

institution

1051372 4,100,079 3,000,000

Investment 113089261 96,631,874 167,134,465

Advances 218960598 262,135,470 253,249,407

Other asset 17868761 19,810,476 23,040,095

operating fixed Assets 16024123 17,263,733 18,014,896

Deferred tax Assets - - -

Total 410485517 443615904 509223727



Debt / Equity Ratio

Ratio

Analysis

Muslim Commercial Bank Limited Debt to Equity Ratio: = Total liabilities (Debt) / Shareholder equity

2007 2008 2009

Debt /

Equity

Ratio

355365842 /55119675

6.44

385179850 / 58436054

6.59

439483714 / 69740013

0.63

Debt to Equity Ratio

6.44

6.59

0.63

0 1 2 3 4 5 6 7

2 0 0 7

2 0 0 8

2 0 0 9



Working of Shareholder Equity

Share Holder Equity

= Total Assets – Total Liabilities



Times Interest Earned

Ratio

Analysis

Muslim Commercial Bank Limited Time Interest Earned Ratio = (EBIT) / Interest expenses

2007 2008 2009

Time

Interest

Earned

29173568 / 7,865,533

3.70

33428306 /11,560,740

2.89

38996408 /15,841,463

2.46

2.46

2.89

3.7 2 0 0 7

2 0 0 8

2 0 0 9



Working of EBIT

EBIT 2007

(Rs)

2008

(Rs)

2009

(Rs)

Profit before tax 21308035 21,867,566 23,154,945

Add) interest / markup

expenses

7865533 11,560,740 15,841,463

Total 29173568 33428306 38996408

Interest / markup Expenses are available in P&L Account



TOTAL CAPITALIZATION RATIO

Ratio

Analysis

Muslim Commercial Bank Limited Total Capitalization Ratio = Long term debt / Long term debt + Share holder equity

2007 2008 2009

TotalCapitalizat

ion ratio

1659394 /1659394+5511967516

59394 / 56779069

0.02

437137 /437137+58436054

437137 / 58873191

0.13

3196743 / 3196743+69740013

3196743 / 72936756

0.04

TOTAL CAPITALIZATION RATIO

0.02

0.13

0.04

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14

2 0 0 7

2 0 0 8

2 0 0 9



Working of long term liabilities

Long term

Liabilities

Year 2007

(Rs)

Year 2008

(Rs)

Year 2009

(Rs)

Sub-ordinates

loans

292098066 - -

Deferd tax liability 1180162 437,137 3,196,743

Liabilities against

assets subject tofinance lease

479232 - -

Total 293757460 437,137 3,196,743





Total Assets Turnover

Ratio

Analysis

Muslim Commercial Bank Limited Total Assets Turnover = Sales / Total Assets

2007 2008 2009

Total

Asset

Turnover

31786595 /410485517

0.07

40043824 /443615904

0.09

51616007 /509223727

0.10

0.07

0.09

0.1

0 0.05 0.1

1

2 0 0 7

2 0 0 8

2 0 0 9

Total Asset Turnover

2009 51616007

/509223727

2008 40043824

/443615904

2007

31786595/410485517



Fixed Assets Turnover

Ratio

Analysis

Muslim Commercial Bank Limited Fixed Assets Turnover = Sales / Total Fixed Assets

2007 2008 2009

Fixed

Assets

Turnover

31786595 /16024123

1.9840043824 / 17263733

2.31

51616007 / 18014896

2.86

1.98

2.31

2.86

0 1 2 3

1

2 0 0 7

2 0 0 8

2 0 0 9

Fixed Asset Turnover

2009 51616007 /

18014896

2008 40043824 /

17263733

2007 31786595

/16024123



Saleis the value of "Net Sales" or "Sales" from the

company's income statement

Total Fixed AssetsTotal fixed assets are the value of

all the assets which is not current assets. Total Fixed

assets are available in the balance sheet.





Net Profit Margin

Ratio

Analysis


Net Profit Margin = Net Income / sales *100

2007 2008 2009

Net profit

Margin

20,808,390 / 31786595

0.65 or 65.4%

20,526,669 / 40043824

0.51 or 51.2%

24,710,953 / 51616007

0.47 or 47.8%

65.40%

51.20%

47.80%

0.00% 20.00% 40.00% 60.00% 80.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Net Profit Margin

2009 24,710,953 /

51616007

2008 20,526,669 /

40043824

2007 20,808,390 /

31786595



Working of Net Income

Net Income 2007 2008 2009

Net mark – up /

interest income after

provisions

20856011 24,463,963 28,452,223

Add) Non – mark – up /

interest income

6011291 5,791,440 5,642,885

Less)

Non – mark – up /

interest expenses

26867302 8,387,837 10,940,163


Less) taxes 6042473 6,492,966 7,659,648

Profit after tax 15265562 15,374,600 15,495,297

Less) other expenses 5542828 5,152,069 9,215,656

Net income 20808390 20,526,669 24,710,953



Return on Assets

Ratio Analysis Muslim Commercial Bank Limited

Return on Assets = Net income after tax / Total Assets * 100

2007 2008 2009 Return on

Assets

15265562/410485517*1

00

3.71%

15374600/443615904*1

00

3.46%

15495297/509223727*1

00

3.04%

3.71%

3.46%

3.04%

0.00% 1.00% 2.00% 3.00% 4.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Return on Assets

2009

15495297/509223727*1

00

2008

15374600/443615904*1

00

2007

15265562/410485517*1

00



Working of Net income after tax

Net income after

tax

2007 2008 2009

Net mark – up /

interest income after

provisions

20856011 24,463,963 28,452,223

Add) Non – mark – up /

interest income6011291 5,791,440 5,642,885

Less)

Non – mark – up /

interest expenses

26867302 8,387,837 10,940,163


Less) taxes 6042473 6,492,966 7,659,648

Net income after tax 15265562 15,374,600 15,495,297



Operating Income Margin

Ratio

Analysis


Operating margin = operating Income / Net sales*100

2007 2008 2009

Operating

income

margin

24,369/31786595

7.66 %

25,910 / 400438246.47%

30,620 / 516160075.93%

7.66

6.47

5.93

0 2 4 6 8

1

2 0 0 7

2 0 0 8

2 0 0 9

Operating income Margin

2009 30,620 / 51616007

2008 25,910 / 40043824

2007 24,369/ 31786595



Operating Income = Available in Six year Analysis of the company



Return on Operating Assets

Ratio

Analysis


Return on operating Assets = sales / operating assets

2007 2008 2009

Return on

operating

Assets

31786595/16082781

1.97

40043824 / 17320485

2.31

51616007 / 18099010

2.85

Return on Operating Assets

1.97

2.31

2.85

0 0.5 1 1.5 2 2.5 3

2 0 0 7

2 0 0 8

2 0 0 9



Working of operating Assets

Operating Assets 2007 2008 2009

Capital work – in –

progress233390 510,226 1,099,749

Property andequipment 15607660 16,562,309 16,666,905

Intangible asset 183073 191,198 248,242

Total 16024123 17,263,733 18,014,896



Return on Equity

Ratio

Analysis


Return on Equity = Net income after tax / Total Equity* 100

2007 2008 2009

Return on

equity

15265562/45414156*10

0

33.6%

15374600/52244865*

100

29.4%

15495297/61075932*

100

25.4%

33.60%

29.40%

25.40%

0.00% 10.00% 20.00% 30.00% 40.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Return on Equity

2009

15495297/61075932*100

2008

15374600/52244865*100

2007

15265562/45414156*100



Working of Total Equity

Total equity 2007 2008 2009

Share capital 6282768 6,282,768 6,911,045

Reserves 34000638 36,768,765 38,385,760

Un appropriated

profit

5130750 9,193,332 15,779,127

Total 45414156 52,244,865 61,075,932



Gross profit Margin

Ratio

Analysis


Gross Profit Margin Ratio = Gross Profit / Net Sales

2007 2008 2009

Gross

Profit

Margin

23921062 / 31786595

0.75

28483084 / 40043824

0.71

35774544 / 51616007

0.69

0.75

0.71

0.69

0.66 0.68 0.7 0.72 0.74 0.76

1

2 0 0 7

2 0 0 8

2 0 0 9

Gross Profit Margin

2009 35774544 /

51616007

2008 28483084 /

40043824

2007 23921062 /

31786595



Working of Gross Profit

Gross Profit 2007 2008 2009

Mark – up / return /

interest earned

31786595 40,043,824 51,616,007

Less) Mark – up /

return / interest

expensed

7865533 11,560,740 15,841,463

Total 23921062 28,483,084 35,774,544



DuPont Return on Assets

Ratio

Analysis


DuPont Return on Assets = Net Income * Sales_____

Sales Total Assets

2007 2008 2009 DuPont

return on

assets

20,808,390/31786595

*

31786595/410485517

0.65*0.07

0.04

20,526,669 / 40043824

*

40043824 /443615904

0.41*0.09

0.03

24,710,953 / 51616007

*

51616007 /509223727

0.47*0.10

0.04

0.04

0.03

0.04

0 0.01 0.02 0.03 0.04

1

2 0 0 7

2 0 0 8

2 0 0 9

DuPont Return on Assets

2009 24,710,953 /

51616007 * 51616007

/509223727 0.47*0.10

2008 20,526,669 /

40043824 * 40043824

/443615904 0.41*0.09

2007 20,808,390 /

31786595 * 31786595

/410485517 0.65*0.07





Dividend Per Share

Ratio

Analysis


Dividend per share = Dividend paid to share holder

Average common share outstanding

2007 2008 2009

Dividend

per share

4728496/ 691104527

400.0

9834175/ 691104527

125.9

6735510 / 691104527

219.7

Dividend Per Share

400.0

125.9

219.7

0 100 200 300 400 500

2 0 0 7

2 0 0 8

2 0 0 9



Dividend paid to share holder

Source: Cash flow statement of MCB

Average common share outstanding source: financial statement analysis notes of

MCB

Note # 32 page # 106



Earning Per Share

Ratio

Analysis


Earning Per share = Profit Available to shareholders or Net income after tax

No of shares outstanding

2007 2008 2009

Earning

per share

20,808,390 / 1102183

22.09

20,526,669 / 92130422.25

24,710,953 / 111864822.42

Earning Per Share

22.09

22.25

22.42

21.9 22 22.1 22.2 22.3 22.4 22.5

2 0 0 7

2 0 0 8

2 0 0 9



No of shares outstanding= Net income after tax

EPS

EPS is available in balance sheet

Net incomeis available in P&L account of the

MCB



Price Earning Ratio

Ratio

Analysis


Price Earning Ratio = Current market Share price / Earning Per Share

2007 2008 2009 Price

Earning

ratio

18.11 * 22.09

400.0

5.66 *22.25

125.9

9.80 * 22.42

219.7

PRICE EARNING RATIO

400.0

125.9

219.7

0 100 200 300 400 500

2 0 0 7

2 0 0 8

2 0 0 9



Working of Price Earning Ratio

EPS is available in balance sheet

PE Ratio is available in year analysis of the company.

Current market Share price= PE * EPS



Conclusion

The overall analysis shows that MCB is in good condition

throughout the analysis years 2007

In the next year 2008 & 2009, there is decrease in the value of

profit as compare to previous year. During this year theoperating cost was max and its operational profit was

minimum as compare to previous year .The reason behind this

due to uncertainty in the process of increase in payables,

increase in capital work in progress and less investment

during this year.

Earning per share is also increase during these years for the

stocks holders and the persons interested in MCB investment.

Insufficient Staff in branches



Recommendation

MCB Should focus more on training needs of staff in line with practical banking, especially IT based products

Bank should acquire modern automation system to provideefficient and prompt service to the customers

Before lending loan to the client or financing a project a teamof expert should physically visit the site and then evaluate its

feasibility for investment. If the investment and project is profitable then should go on otherwise should not invest.

Increase in Mobile Banking including ATM , online Banking etc.

Take step to increase the profit.

Investment in assets should be appropriate.



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Documents

Ratio MCB Bank