Final Project of Fin619

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RATIO compend OFASKARI slang, UNITED BANK AND BANK ALFALAH FOR THE YEARS 2009, 2010, 2011 A PROPOSAL FOR REPORT TO BE SUBMITTED TO THE part OF MANAGEMENT SCIENCES, VIRTUAL UNIVERSITY OF PAKISTAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF grasp IN BUSINESS ADMINISTRATION (MBA-Exec) Submitted By AAMIR SHAHZAD MC nose candy403644 MBA-Exec (Finance) SUBMISSION DATE 02-02-2013 realistic University of Pakistan Letter of Undertaking Job confirmation letter pic Dedication I would like to dedicate this start to My parents My Wife & My Kids Ashar Ali & Mubashar Ali AcknowledgementAll my efforts for my MBA and this Project would constitute been zip with out the help and grace of Almighty Allah and I am incessantly Gratified to Blessings of Allah. More than anybody else, I would like to acknowledge my uncle Mr. Ashfaq Ali Tabassam for his never endpoint support. He always guided me whenever I felt stuck off and his rise always worked as moral booster for me. I would like to contribute my special thanks to my friend Mr. Aamir who advised me time to time and provided me good assistance. I am senior gamely indebted to my boss in my nerve Mr.Muzaffar Ali who spared me and gave me ample time, out of my professional commitments, to go all out for my MBA from practical(prenominal) University of Pakistan. Exe hack onive Summary The purpose of this report titled RATIO ANALYSIS OF ASKARI BANK, UNITED BANK AND BANK ALFALAH FOR THE YEARS 2009, 2010, 2011is to canvas the fiscal action of these believes during the mentioned stream. The first chapter of this report deals with introduction of project and edges under reflect, financial extent under consideproportionn, objectives and moment of the project. The encourage part is about information touch and psychoanalysis.The fourth chapter is about calculation of distinct proportions its equivalence and interpretation. In stretch forth chapter conclusions and recommendations have been given. The data for the study is collected from financial repots of the coin cusss which are available on theirs respective websites. The financial reports included the balance sheet, income statement and hard currency coalesce statements. As regards to purpose of study, the ne bothrk derive adjustment balance of Askari and coast Alfalah is low as analyse to UBL. UBL is also on hand in flagrant disseminate proportionality, birth on equity, debt dimension and throw out/ ready balance. succession Askari shore has better cash flow ratio and expense/Earning ratio. It is recommended for trust Alfalah and Askari bound to cut down their non markup expenses to improve their elucidate Profit allowance symmetry while, on the early(a) hand their turnover is satisfactory. UBL and Alfalah should settle their current liabilities and ensure the availability of more than(prenominal) liquidity to join compendious term debts. Askari till and bank Alfalah both banks need to lift out measures to cut down their cheer expenses in order to addition their gross spread ratio.In order to ontogeny non following income Askari and Alfalah needs to increase their earnings done with(predicate) fees, commissions and some otherwise advisory charges etc. In Advance/Deposit ratio Askari bank and Alfalah should have to utilize their deposits in more projects all done corp oral financing or general public financing. Table of confine Section I Chapter 18 1. 1 admission of the project 1. 2 affirms Introduction 1. 4 Period Under Consideration 1. 5 Objectives 1. 6 import Chapter 2. 11 2. 1 selective information entreaty 2. 2 info Processing and Analysis Chapter 3. 12 3. 1 lucre Profit Margin 3. 2 operate cash flow ratio 3. 3 staring(a) disruption ratio 3. 4 Non- rice beer income to phone depend income ratio 3. 5 feast ratio 3. 6 Advances/deposit ratio 3. 7 cede on essence equity (ROE) 3. 8 Debt ratio 3. 9 Debt/fairness ratio 3. 10 terms/Earning ratio Chapter 4. . 26 4. 1 Conclusions 4. 2 Recommendations Section I a) Student Introduction 29 b) Biblio interprety 30 Section IChapter 1 1. Project Introduction The financial ratio analysis techniques referred to in this aid could be useful to hit the books any keep company financial performance. This study is also going to investigate the financial performance of collar m entioned banks e. g. Askari bank, united bank and buzzword Alfalah. These banks are surveying in the Pakistani Market and are competitors each other. and then this study is going to find out which bank has strong financial position over other devil banks. With the help of financial ratio analysis we can analyze the financial position of any company.Many stakeholders, investors, creditors may analyze any company, firms financial position with the help of ratio analysis in advance taking any important decision regarding to investments or any other. Therefore financial ratio is a mathematical correlation among several(prenominal) numbers often stated in the form of dower, multiplication, or days. 1. 2 hopes Introduction Askari believe was incorporated in Pakistan on October 9, 1991, as a public extra company. It commenced operation on April 1, 1992, and is principally engaged in the busi mantle of banking, as defined in the savings banking Companies Ordinance, 1962.The swan is listed on Karachi, Lahore and capital of Pakistan Stock Exchanges. Since inception, the bank has concentrated on growth by dint of amend service quality, investment in technology and people, utilizing its broad branch lucre which includes Islamic and Agricultural banking. United slang limit (UBL) was incorporated in Pakistan on November 7th 1959. In 1963 the bank opened its first foreign branch in London, United Kingdom. In 1971 the UBL was nationalized by the regimen. In 2002, the Government of Pakistan sold it in an open auction to a consortium of Abu Dhabi aggroup and Bestway. on-goingly UBL is one of the largest commercial banks in Pakistan having more than 1,220 online branches inside the country. Its 15 branches out of doors the country are in the United States of America, Qatar, UAE, Bahrain, and Republic of Yemen. It also has illustration offices in Tehran (Iran), and Almaty (Kazakhstan). It owns subsidiaries in the UK (United National jargon Limited), and in Zurich (Switzerland). beach Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from 1st Nov, 1997.The marge is shortly operating through various branches in Pakistan, Bahrain, Bangladesh & Afghanistan, with the registered office at B. A. Building, I. I. Chundrigar, Karachi. change with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. During the past five divisions, Bank Alfalah has emerged as one of the frontmost financial institution in the region endeavoring to meet the needs of tomorrow today. 3. Financial Period Under-Consideration for AnalysisFinancial geological period under context for analysis (2009, 2010, 2011) 4. Objectives 1. To analyze the selected banks efficiency in managing their resource for generating pull ahead 2. To war paint of capital structure of the selected banks, how oft of the banks assets are financed through external and internal debt. 3. To find out that how effectively selected banks are maximize their profit by controllerling their interest expenses. 4. To oppose the selected banks interest income with their interest expenses. 5. Are banks able to devote the current liabilities from their cash equivalents? . implication The significance of these projects may include the following 1. The finding of this research entrust be more beneficial for investors, creditors, to take good decision after sightedness the result of ratio. They can easily analyze the bank position through this study result. Bank Management may also study the finding of this study to determine the success or failure of particular sales, selling as well as financing strategies. 2. At the end of this research, we give be able to get which bank is more able to pay its current liabilities from thei r cash equivalents. 3.The major outcomes of this research, this study will clear the design regarding to financial ratio analysis in banking sector by applying different ratios. 4. This research may help the stakeholders to analyze financial ratios result before taking any serious decisions. 5. Financial mangers of selected banks also take advantages from this study to identify their bank strengths and weakness and will improve their poor areas. Chapter 2) Data Processing & Analysis 1. Data Collection Sources flying field has used common chord banks annual reports/balance sheet, income statements, cash flow statements for data analysis and data processing.In research only secondary would be used to access the objectives which are mentioned as above. The study has used secondary sources to access the objectives of this research. The sources of this research were leadsome banks websites. Annual reports were collected from the websites 2. Data Processing and Analysis Tools Data was processed, canvas and all the entry has done on excel sheet. Hence Study has used Excel sheet for data analysis and for calculation purpose. response has been displayed on MS world in tabulation form with interpretation. Chapter 3) Data Analysis proportion Analysis 1 Net Profit Margin SignificanceNet profit edge ratio explicit the profitability of the institution against the revenue. It will also define the performance of the company in its operations in the market. So, doweryholders assess it carefully in order to take their economic decisions. normal Net profit beach= (Net profit/ Revenue) * one C Banks 2009 2010 2011 UBL 9,192,687/61,107,025*century 11,159,930/59,331,761* carbon 15,499,663/70,450,475* speed of light 15. 4% 18. 81% 22. 00% Askari Bank 1,097,507/22,586,736* nose candy 943,177/27,952,162*100 1,627,698/32,766,351*100 4. 86% 3. 37% 4. 97% Bank Alfalah 897035/35561312 *100= 968452/37530256*100= 3503130/44298178*100= 2. 2% 2. 58% 7. 91% Banks 2009 2010 2011 UBL 15. 04 18. 81 22. 00 Askari Bank 4. 86 3. 37 4. 97 Bank Alfalah 2. 2 2. 58 7. 91 pic exposition and comparison The analysis of above circuit card and graph depicts that the Net Profit Margin of all the Three banks is increase. UBL is on the top with 15. 04% earning in the period of 2009 and change magnitude in the respective familys with 18. 81% in the twelvemonth 2010 and 22% in 2011 which installs a positive path which is due to the stringent control on operating expenses . While on the side, Askari bank Profit margin marchs minor fluctuation with 4. 6% in the period 2009 then decreases in 2010 to 3. 37% owing to increase in non markup expenses and increases to 4. 49% in the course of instruction 2011. Profit margin of Bank Alfalah is also showing positive ness which is 2. 52% in 2009 and 2. 58% in the category 2010 and sore up to 7. 91% in 2011. 2 Operating Cash Flow Ratio Significance The ratio explains the cash flows of the bank or company which it earns by its operations and analyze it against it current liabilities to determine how well a company is in paying its debts which fall due in the financial category.FORMULA transaction Cash Flow Ratio= Net cash generated from operating activities/ Current Liabilities Banks 2009 2010 2011 UBL 23,099,432/262214540= 100,070,348/369628811= 108,571,682/407621100= 0. 09 propagation 0. 27 propagation 0. 7 time Askari Bank 36,245,071/49327164= 35,810,016/114583064= 36,491,839/14943963= 0. 73 Times 0. 31 multiplication 2. 44 quantify Bank Alfalah 19945927/350833577= 18112043/184831395= 54274913/194917015= 0. 06 generation 0. 0 time 0. 28 time Banks 2009 2010 2011 UBL 0. 09 0. 27 0. 27 Askari Bank 0. 73 0. 31 2. 44 Bank Alfalah 0. 06 0. 0 0. 28 pic working(a) Current Liabilities of UBL 2009 2010 2011 Bills payable (Short term) 5,147,259 5,045,815 5,879,043 Borrowings (Short term) 35,018,765 44,187,313 45,534,286 Deposits and other accounts (Short term) 209,685,205 319,797, 360 340,999,875 Liabilities against assets payoff to finance Lease (Short term). separate liabilities (Short term) 12,363,311 369,628,811 407,621,100 count 262,214,540 369628811 407,621,100 work Current Liabilities of Askari Bank 009 2010 2011 Bills payable (Short term) 2,945,6703,089,9842,756,032 Borrowings (Short term) 19,300,16325,554,7772,758,043 Deposits and other accounts (Short term) 22,247,84228,646,7715,516,086 Liabilities against assets subject to finance ease (Short term). Other liabilities (Short term) 4,833,48957,291,5323,913,802 complete 49,327,16411458306414,943,963 Working Current Liabilities of Bank Alfalah 2009 2010 2011 Bills payable (Short term) 3,766,144 4,521,533 5,403,453 Borrowings (Short term) 20,107,541 13,050,006 17,060,524 Deposits and other accounts (Short term) 320,249,261 161,368,880 165,257,870 Liabilities against assets subject to finance lease (Short term). 4,429 3,031 Other liabilities (Short term) 6,706,202 5,887,945 7,1 95,168 complete 350,833,577184,831,395194,917,015Interpretation and comparison The analysis of the above tabular array and graph show that Operating Cash Flow of UBL is 0. 09 time in the period 2009 and 0. 27 generation in the periods 2010 and 2011 shows consistency in respective course of instructions. While the cash flow of Askari bank is 0. 73 times in 2009 and decreases to 0. 31 times due to decline in cash generated from operating activities and increases to 2. 44 times in the year 2011 due to the decline in short term liabilities and increase in cash generation. Cash flow of Bank Alfalah is 0. 6times in the year 2009 and 0. 10 times in 2010 and 0. 28 times in the period 2011 shows change magnitude drive. 3 Gross Spread Ratio Significance It is world calculated by dividing the difference of interest clear and expensed by interest expensed on the deposits of the public. It will help to measure the markup income of the bank in the describe period. FORMULA Gross Spread Ratio = (Mark-up / return / interest gain Mark-up / return / interest expensed) / Mark-up / return / interest earned*100 Banks 2009 2010 2011 UBL 61,107,025- 28,163,787= 59,331,761- 24,997,188= 70,450,475 -31,025,869= 32,943,238/61,107,025= 34,334,573/59,331,761= 39,424,606/70,450,475= 53. 1% 57. 87% 55. 96% Askari Bank 22,586,736 13,554,078 = 27,952,162 17,936,616= 32,766,351- 22,699,583= 9,032,658/22,586,736 = 10,015,546/27,952,162= 10,066,768/32,766,351 = 30. 72 % 39. 99% 35. 3 % Bank Alfalah 35561312 24654180 =10907132/35561312 =37530256 23855448= 44298178 25687485= 30. 67% 13674808/37530256 = 18610693/44298178 = 36. 44% 42. 01% Banks 2009 2010 2011 UBL 53. 91 57. 87 55. 96 Askari Bank 39. 99 35. 83 30. 72 Bank Alfalah 30. 67 36. 44 42. 1 pic Interpretation and comparison The analysis of the above delay and graphical representation shows the Gross Spread Ratio of UBL 53. 91% in the period 2009 and increases to 57. 87% in the period 2010 and then decre ases to 55. 96% in 2011 respectively, UBL is on the top in interest earning in the market. Askari bank ratio is 39. 99% in the period 2009, 35. 83% and 30. 72% in the periods 2010 and 2011. While Bank Alfalah ratio is increasing from 2009 to 2011 with 30. 67%, 36. 44% and 42. 01% which is better marginally then other banks. merely UBL is earning more as differentiate to other two banks due to better insurance policy making and service. 4 Non- occupy Income to centre Income Ratio Significance It is other income which a bank earn from its services related to non markup sources such as advisory services and consultation provided in risk management etc. It describes the percentage of non interest income to heart and soul income of the bank or company. FORMULA Non Mark-up / interest income to total income ratio= non mark-up / interest income / (non mark-up / interest income +Mark-up / return / interest earned)*100 Banks 2009 2010 2011 UBL 11,419,571/72526596= 10,090,162/69421923= 12 ,718,253/83168728= 15. 75% 14. 53% 15. 29% Askari Bank 2,544,415/25131151= 2,800,297/30752459= 2,902,921/35669272= 10. 2% 9. 11% 8. 14% Bank Alfalah 5182253/40743565 = 4708161/42238417= 5367713/49665891 = 12. 72 % 11. 15% 10. 81% Banks 2009 2010 2011 UBL 15. 5 14. 53 15. 29 Askari Bank 10. 12 9. 11 8. 14 Bank Alfalah 12. 72 11. 15 10. 81 pic Interpretation and comparison The analysis of the above table and graph shows the Non Interest income of all the three banks with the highest ratio of UBL which is 15. 75% in the period 2009 and 14. 3% in the period 2010 and in 2011 is 15. 29% in comparison with Askari bank and Bank Alfalah. Askari Bank earn 10. 12% in the period 2009 and 9. 11% and 8. 14% in 2010 and 2011 which is declining. While Bank Alfalah ratios are 12. 72%, 11. 15% and 10. 81% in the years 2009, 2010 and 2011 is declining respectively. So, UBL shows better ratio as comparing to the other banks in all the three years. The Results shows that UBL shows fluctuat ion while the other banks ratios show declining trend. Working of wide-cut income of UBL kernel Income= (Non mark-up / interest income +Mark-up / return / interest earned) Total Income Non Mark-up/interest income 11,419,571 10,090,162 12,718,253 Mark-up/return/interest earned 61,107,025 59,331,761 70,450,475 Total Income = 72526596 69421923 83168728 Working of Total income of Askari Bank Total Income Non Mark-up/interest income 2,544,415 2,800,297 2,902,921 Mark-up/return/interest earned 22,586,736 27,952,162 32,766,351 Total Income 25131151 30752459 35669272 Working of Total Income of Bank Alfalah Total Income= (Non mark-up / interest income +Mark-up / return / interest earned) Total Income Non Mark-up/interest income 5182253 4708161 5367713 Mark-up/return/interest earned 35561312 37530256 44298178 Total Income 40743565 42238417 49665891 Interpretation and comparison Interpretation is missing. 5 Spread Ratio Significance It is the ratio that describes the ma rkup spread between income and expense. It helps to measure how much income bank earns by incurring markup cost.Higher ratio shows more profitability through loans and investments. Formula- Spread Ratio = Interest Earned / Interest Expensed Banks 2009 2010 2011 UBL 61,107,025/28,163,787= 59,331,761/24,997,188= 70,450,475/31,025,869= 2. 17 times 2. 37 times 2. 7 times Askari Bank 22,586,736/13,554,078= 27,952,162/17,936,616= 32,766,351/22,699,583= 1. 68 times 1. 56 times 1. 44 times Bank Alfalah 35561312/24654180 = 37530256/23855448= 44298178/25687485= 1. 44 times 1. 7 times 1. 72 times Banks 2009 2010 2011 UBL 2. 17 2. 37 2. 27 Askari Bank 1. 67 1. 56 1. 44 Bank Alfalah 1. 44 1. 7 1. 72 pic Interpretation and comparison The analysis of the above table and graph shows the Spread Ratio of the UBL which is highest as compare to the other two banks, is at 2. 17 times in the year 2009 and increases to 2. 37 times in the year 2010 and 2. 27 times in the year 2011, decreases the zig zag trend is due to the fluctuation in both aspects interest earn and expensed. While the ratio of Askari bank 1. 67% in the year 2009, 1. 56% in the year 2010 and 1. 4% in the year 2011 respectively. Bank Alfalah ratio shows increasing trend throughout the three years 2009 to 2011 which are as 1. 44%, 1. 57%, 1. 72% which shows better reco rattling of interest income from its investments 6 Advances / Deposits Ratio Significance It defines the advances banks make from the available deposits. It measures the ability of the bank in productive usage of money of the depositors which will increase the markup income. FORMULA Advances / Deposits Ratio= Total Advances/ Total Deposits Banks 2009 2010 2011 UBL 354,091,713/492,036,103= 333,732,172/550,645,767= 325,347,208/612,980,139= 0. 72 times 0. 61 times 0. 53 times Askari Bank 135,034,499/205,970,227= 152,784,137/255,936,503= 150,710,709/291,502,993= 0. 6 times 0. 60 times 0. 52 times Bank Alfalah 188042438/324759752= 2071 52546/354015311= 198468512/401247886= 0. 58 times 0. 59 times 0. 49 times Banks 2009 2010 2011 UBL 0. 2 0. 61 0. 53 Askari Bank 0. 66 0. 60 0. 52 Bank Alfalah 0. 58 0. 59 0. 49 pic Interpretation and comparison The analysis of the above table and graph shows Advance/Deposit ratio of UBL which is very high as compare to other banks 0. 2 times in the year 2009 and 0. 61 times in the year 2010 and 0. 53 in the year 2011. Askari bank ratio is 0. 66 times, 0. 60 times and 0. 52 times in the consecutive years 2009, 2010 and 2011. While the ratio of bank Alfalah is 0. 58 times in 2009 and increases to 0. 59 times 2010 and decline drastically to 0. 49 times in 2011with 0. 10 times which shows that Bank Alfalah is not utilizing its deposits effectively as compare to other banks. 7 paying back on Total fairness (ROE) Significance It measures income bank earns from the equity.It determines the ability of the institution how fruitfully it uses the money of look atholders in its busine ss. High ratio will allure more investors. FORMULA Return on total Equity=Net Income/ Total equity*100 Banks 2009 2010 2011 UBL 9,192,687/52276246*100= 11,159,930/60180924*100= 15,499,663/70,622,933*100= 17. 58 % 18. 4 % 21. 94% Askari Bank 1097507/ 13142688 943177/ 14820578*100= 1627698/ 16508782*100= *100= 8. 35 % 6. 36 % 9. 86 % Bank Alfalah 897035/ 19770260 *100= 968452/ 19726556*100= 3503130/ 22839886*100= 4. 4 % 4. 91 % 15. 34 % Banks 2009 2010 2011 UBL 17. 58 18. 54 25. 76 Askari Bank 8. 35 6. 36 9. 86 Bank Alfalah 4. 4 4. 91 15. 34 pic Working of Total Equity UBL (UBL) Working Total equity Total Equity 2009 2010 2011 parcel capital 11,128,907 12,241,798 12,241,798 Reserves 18,959,537 21,688,637 Un appropriated profit 22,187,802 26,250,489 Total Equity 52276246 60180924 Working of Total Equity (Askari bank) 2009 2010 2011 Share capital 5,073,467 6,427,440 7,070,184 Reserves 7,235,710 7,691,319 8,136,440 Un appropriated profit 833 ,511 701,819 1,302,158 Total Equity 13,142,688 14,820,578 16,508,782 Working of Total Equity (Bank Alfalah) 2009 2010 2011 Share capital 13491563 13491563 13491563 Reserves 3587969 3819133 4100264 Un appropriated profit 2690728 2415860 5248059 Total Equity 19770260 19726556 22839886 Interpretation and comparison The analysis of the above table and graph show the Return On equity of all the three banks. UBL ratio is 17. 58% in the year 2009, 18. 54% in the year 2010 and 25. 76% in the year 2011. While Askari bank ratio is 8. 35% in 2009, 6. 36% in the period 2010 and 9. 86% in 2011 respectively. Bank Alfalah ratios are 4. 54%, 4. 91% and 15. 34% in the periods 2009, 2010 and 2011.So on marginal can Alfalah improves utilization of equity then other two banks. But on the whole, UBL is on the top in optimum utilization of stakeholders equity. 8 Debt Ratio Significance It measures the liabilities of the bank or company against the total assets. It should be low as investors like low ratio because the need their correspondence interest to be secured. FORMULA Debt ratio= (Total debt/ Total assets)*100 Banks 2009 2010 2011 UBL 558,779,710/619,718,433*100= 631,402,822/699,817,887*100= 698,906,833/778,059,741*100= 90. 7% 90. 22 % 89. 83 % Askari Bank 239,378,374/254,327,446*100= 298,740,410/314,744,552*100= 325,980,040/343,756,306*100= 94. 12 % 94. 92% 94. 83% Bank Alfalah 366936635/389070055*100= 389178295/411483839*100= 442396764/468173802*100= 94. 31% 94. 58 % 94. 49 % Banks 2009 2010 2011 UBL 90. 17 90. 22 89. 83 Askari Bank 94. 12 94. 92 94. 83 Bank Alfalah 94. 31 94. 58 94. 49 pic Interpretation and comparison The analysis of the above table and graph show the Debt Ratio, UBL ratio is 90. 17 in the year 2009, 81. 15% in the year 2010 and 99. 7% in the year 2011. Askari bank ratio is 94. 12% in 2009, 94. 12% in 2010 and 94. 83% in 2011 which show consistency in the three years. Bank Alfalah shows also reconciled trend in 2009, 2010 and 20 11 are 94. 31%, 94. 58% and 94. 49%. So results show that UBL ratio is increasing which is not good indication as compare to other banks, while other banks are controlling effectively their Debt ratio. 9 Debt / Equity Ratio Significance It is the percentage of liabilities to shareholders money. It will define any the bank is equity or liability based. It also helps to assess the how bad the company is. FORMULA Debt / Equity Ratio = (total debt/ total equity) Banks 2009 2010 2011 UBL 558,779,710/52276246= 631,402,822/60180924= 698,906,833/70,622,933= 10. 69 times 10. 49 times 9. 90 times Askari Bank 239,378,374/13142688= 298,740,410/14820578= 325,980,040/16508782= 18. 21 times 20. 16 times 19. 75 times Bank Alfalah 366936635/19770260 = 18. 56 times 389178295/19726556= 19. 73 times 442396764/22839886= 19. 37 times Banks 2009 2010 2011 UBL 10. 69 10. 49 11. 61 Askari Bank 18. 21 20. 16 19. 75 Bank Alfalah 18. 56 19. 73 19. 37 pic Interpretation and comparison The analys is of the above table and graph shows the Debt/Equity ratio where UBL ratio is 10. 69% in 2009,10. 49% in the year 2010 and 11. 1% in the year 2011 respectively which remains consistent in first two years then increases in 2011. Askari bank ratio is 18. 21% in 2009 which too high as compare to UBL, 20. 16% in 2010 and 19. 75% in the year 2011. While Bank Alfalah is on the same level 18. 56% in 2009, 19. 73% and 19. 37% in the years 2010 and 2011. As as consequence of analysis, UBL ratio is much better then other banks as its ratio is approximately 8% below the other banks ratio. 10 Price/Earnings Ratio Significance It will define the price of share against the per share earning. It should be high as it shows business prosperity and growth chances are bright in future. FORMULA P/E = Current Market Share Price/ EPS Working of EPS EPS WORKING UBL 2009 2010 2011 Net Income= 9,192,687 Net Income= 11,159,930 Net Income= 15,499,663 issuing of shares= 1,112,890 Number of shares= 1,224,1 79 Number of shares= 1,224,179 = Net income/ prominent number of shares = Net income/ outstanding number of shares =9,192,687 / 1,112,890 = 11,159,930/1,224,179 = Net income/ outstanding number of shares = 8. 26 per share = 9. 12 per share = 15,499,663/1,224,179 = 12. 66 per share No of outstanding share figure has been taken from the notes i. e Share capital EPS WORKING ASKARI BANK 2009 2010 2011 Net Income= 1,097,507 Net Income=943,177 Net Income= 1,627,698 Number of shares= 642,743 Number of shares= 707,018 Number of shares= 507,346 = Net income/ outstanding number of shares = 943,177/642,743 = Net income/ outstanding number of shares = Net income/ outstanding number of shares = 1. 47 per share = 1,627,698/707,018 = 1,097,507/507,346 = 2. 30 per share = 2. 16 per share BANK Alfalah 2009 2010 2011 Net Income= 897,035 Net Income= 968,452 Net Income= 3,503,130 Number of shares= 134,9156 Number of shares= 134,9156 Number of shares= 134,9156 = Ne t income/ outstanding number of shares = Net income/ outstanding number of shares = Net income/ outstanding number of shares = 897,035/ 134,9156 = 968,452/ 134,9156 = 3,503,130/ 134,9156 = 0. 66 per share = 0. 71 per share = 2. 59 per share 0. 66 0. 71 2. 59 Banks 2009 2010 2011 UBL 64. 25/8. 26= 7. 77 times 84. 23/9. 12= 9. 23 times 84. 17/12. 66= 6. 64 times Askari Bank 45. 25/2. 16 = 20. 92 times 64. 75/1. 47 = 44. 12 times 73. 49/2. 30 = 31. 92 times Bank Alfalah 77. 45/0. 66 = 116. 48 times 114. 23/0. 72= 159. 13 times 16. 87/2. 60= 6. 69 times Banks 2009 2010 2011 UBL 7. 77 9. 3 6. 64 Askari Bank 20. 92 44. 12 31. 92 Bank Alfalah 116. 48 159. 13 6. 69 pic Interpretation and comparison The analysis of the above table and graph shows the Price Earning ratios, UBL ratio is 7. 77 times in the year 2009, 9. 23 times in 2010 and 6. 64 times in the year 2011is respectively declining. While Askari bank ratio 20. 92 times in 2009, 44. 12 times in 2010 and increases to 31. 2, on the other hand you can see the P/E of bank Alfalah in year 2009,2010, 2011 is 116. 48 in year 2009, 159. 13 year 2010 and 6. 69 in year 2011. After the result it has proved that Bank Alfalah P/E is high and better in year 2009 and year 2010 than other two banks. Askari bank and UBL shows declining trend which is unfavorable for the investors. Chapter 4) Conclusion and Recommendations 4. 1) Conclusion Following findings has been inferred on the primer of above ratio analyses which are as 1. Net profit margin ratio of UBL is high as compare to Askari and Alfalah. In addition to that, Bank Alfalah captures the second level in the comparison.So, UBL has taken over the major share of profit margin 2. Analysis of Operating Cash Flow ratio shows Askari bank ratio is high as compare to UBL and Alfalah. 3. On the basis of ratio analysis UBL gross spread ratio is good and high as compare to Askari and bank Alfalah in the current year. While Bank Alfalah is ranked second in the compar ison. 4. In accordance with the analysis of non-interest income to total income ratio UBL ratio is high as compare to the other two banks. While analysis show Askari bank ratio is lowest than UBL and bank Alfalah. 5. The analysis has shown UBL spread ratio is high and much better than other banks in comparison. 6.On the basis of advance/Deposit ratio analysis UBL ratio is high as compare to Askari and Alfalah in the current year. 7. The analysis of Return on equity ratio shows that UBL return is high and better than the other two banks. 8. Debt ratio Analysis shows that UBL ratio is high than other two banks. While Askari and Alfalah are at the same level. 9. According to the analysis of Debt/Equity ratio Askari bank ratio is high and bank Alfalah is on the second position. 10. The Price/Earning ratio of Askari bank is high in the analysis of the three banks. While UBL is on the second and bank Alfalah is on the third rank. 4. 2) Recommendations 1. The Net profit Margin ratio of Ask ari and bank Alfalah is low.In order to improve their plunder profit both the banks should have to cut down their non markup expenses while, on the other hand their turnover is satisfactory. 2. The Operating cash flow of UBL and Alfalah should have to be improved. These banks should decrease their current liabilities and ensure the availability of more liquidity to meet short term debts. 3. Askari bank and bank Alfalah both banks need to adopt measures to cut down their interest expenses in order to increase their gross spread ratio. 4. In order to increase non interest income Askari and Alfalah needs to increase their earnings through fees, commissions and other advisory charges etc. 5.In Advance/Deposit ratio Askari bank and Alfalah should have to utilize their deposits in more projects either through corporate financing or general public financing. 6. 6. Return on total equity of Askari bank is low, it should increase its net income by cut down its expenses with significant marg in. 7. Debt ratio of UBL is high so it should have to avoid more borrowings and use available funds in more proper ways. 8. Spread ratio of Askari bank is low as compare to other banks it should have to increase its lending and use deposits in effective ways. SECTION II a) Introduction of the student Last Degree Obtained live of Commerce Current Organization Dubai City Flowers LLC, Dubai, UAECurrent Designation Administration trough Experience 10+ years b) BIBLOGRAPHY Askari bank limited Pakistan. (2009). annual-reports. Retrieved celestial latitude 6, 2012, from Askari bank Limited functionary websitehttp//www. askaribank. com. pk/Reports/Askari%20Financials%202009. pdf Askari bank limited Pakistan. (2010). annual-reports. Retrieved December 6, 2012, from Askari bank Limited Official websitehttp//www. askaribank. com. pk/Reports/Askari%20AR2010%20(Final%20Version). pdf Askari bank limited Pakistan. (2011). annual-reports. Retrieved December 6, 2012, from Askari bank Limited Off icial website http//www. askaribank. com. k/Reports/Askari%20AR%202011%20ALL. pdf United bank limited . (2009). Financial-reports. Retrieved December 6, 2012, from United bank Limited Official website https//www. ubldirect. com/corporate/resources/ubl/aboutus/financial_report/report_2009/annual_dec09/UBLAnnualReport2009. pdf. United bank limited . (2010). Financial-reports. Retrieved December 6, 2012, from United bank Limited Official website https//www. ubldirect. com/corporate/resources/ubl/aboutus/financial_report/report_2010/annual_dec10/UBLAnnualReport2010. pdf United bank limited . (2011). Financial-reports. Retrieved December 6, 2012, from United bank Limited Official website https//www. ubldirect. om/corporate/resources/ubl/aboutus/financial_report/report_2011/Annual_Reports/UBL%20Annual%20Report%202011. pdf Bank Alfalah Limited. (2009). Financial-reports. Retrieved December 6, 2012, from Bank Alfalah Limited Official website http//www. bankalfalah. com/about/ transfer/Annua lReport2009. pdf Bank Alfalah Limited. (2010). Financial-reports. Retrieved December 6, 2012, from Bank Alfalah Limited Official website http//www. bankalfalah. com/about/download/BALAnnualReport2010. pdf Bank Alfalah Limited. (2011). Financial-reports. Retrieved December 6, 2012, from Bank Alfalah Limited Official website http//www. bankalfalah. com/about/download/BALAnnualReport2011. pdf