Analysis of Meezan & Faysal Bank

M.Zahid JavaidM.Zahid JavaidCell # 03454399350Cell # 03454399350

MBAMBAFinanceFinance

Financial Statement Analysis ofFinancial Statement Analysis of

&

Introduction of the ProjectIntroduction of the Project• This project is about the comparison of performance This project is about the comparison of performance

through financial statements analysis of Faysal Bank Ltd. & through financial statements analysis of Faysal Bank Ltd. & Meezan Bank Ltd will make me able to evaluate strategies Meezan Bank Ltd will make me able to evaluate strategies of these organizations. of these organizations.

• All the information includes in this project are gathered All the information includes in this project are gathered

annual reports of these financial institutions. annual reports of these financial institutions.

• By showing the performance of two financial institutes will By showing the performance of two financial institutes will helpful for stake holders to analyze & make decisions as helpful for stake holders to analyze & make decisions as well for the investors to predict more accurate assessment well for the investors to predict more accurate assessment for investment. for investment.

• The accurate and sound financial statement analysis is one The accurate and sound financial statement analysis is one the most important and core element of fundamental the most important and core element of fundamental analysis, which include ratio, horizontal, vertical, and trend analysis, which include ratio, horizontal, vertical, and trend & industry analysis & industry analysis

ObjectivesObjectives• The aim of this project is to provide complete knowledge and The aim of this project is to provide complete knowledge and

general idea about the financial system of Banks.general idea about the financial system of Banks.

• To provide precious information to investor, depositor, stake To provide precious information to investor, depositor, stake holder, stock holder, account holder and general public about holder, stock holder, account holder and general public about the past performance and evaluate the currant position through the past performance and evaluate the currant position through financial statements analysis.financial statements analysis.

• More ever through financial statements analysis I shall be able More ever through financial statements analysis I shall be able to work in the structured approach and present them in to work in the structured approach and present them in appropriate form which will be easy understandable for the appropriate form which will be easy understandable for the management and the investor.management and the investor.

SignificanceSignificance• This analysis will provide valuable, constructive & useful This analysis will provide valuable, constructive & useful

information to investor and other interested parties for making information to investor and other interested parties for making decision about investment.decision about investment.

• The achievement of this task is to analyzing financial statement The achievement of this task is to analyzing financial statement to access historical performance, current financial position & to access historical performance, current financial position & make prediction about future performance of banks.make prediction about future performance of banks.

• This project will to summarize the data into a form which is This project will to summarize the data into a form which is easily understandable for the stakeholders. The stake holders easily understandable for the stakeholders. The stake holders ‘investors” who primarily interested in firms profitability and ‘investors” who primarily interested in firms profitability and increment is share price and the “creditors” are interested the increment is share price and the “creditors” are interested the liquidity and solvency strength of the firm. liquidity and solvency strength of the firm.

Data CollectionData Collection

Secondary sources utilized for data collection for this project Secondary sources utilized for data collection for this project which included.which included.

• Annual Reports through URL of following BanksAnnual Reports through URL of following Banks

• Documents on various formatsDocuments on various formats

• Company ProfilesCompany Profiles

• Case StudyCase Study

• Various ArticlesVarious Articles

• Consult with Seniors Consult with Seniors

Data ProcessingData Processing

• Microsoft word and excel work sheets be utilized to compute Microsoft word and excel work sheets be utilized to compute

the different ratio and analysis.the different ratio and analysis.

• This included tabulating, summarizing and presenting the data This included tabulating, summarizing and presenting the data

graphically with the tools available in Microsoft officegraphically with the tools available in Microsoft office

• I also performed some manual work and calculations.I also performed some manual work and calculations.

Ratio AnalysisRatio Analysis• Computing financial ratios is like taking a picture because the Computing financial ratios is like taking a picture because the

results reflect a situation at just one point in time.results reflect a situation at just one point in time.

• The financial ratios are very effectively indicates the The financial ratios are very effectively indicates the performance and financial conditions of the firms. performance and financial conditions of the firms.

• It is defined as the systematic use of ratio to interpret the It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial firm as well as its historical performance and current financial condition can be determined. condition can be determined.

The following ratios be calculated.The following ratios be calculated.• Liquidity RatiosLiquidity Ratios• Leverage RatiosLeverage Ratios• Profitability RatiosProfitability Ratios• Activity RatiosActivity Ratios• Market RatiosMarket Ratios• Cash Flow RatioCash Flow Ratio

Liquidity RatiosLiquidity Ratios The liquidity ratios evaluate the firm ability to meet its

short terms obligations. Followings are the liquidity ratios.

1.Current Ratio2.Sales to Working Capital3.Working Capital

Current Ratio:Current Ratio:

• The current ratio highlights the firm ability to cover short term liabilities with its current assets.

• Current Ratio = Current Assets / Current Liabilities

• Interpretation:• The current ratio of Faysal bank

& Meezan Bank for the year 2007, 2008 & 2009 is, 2.36, 2.06 & 1.64, 1.79, 1.61 & 1.56 respectively, compared to standard ratio 2:1 this of Meezan Bank ratio is then

Faysal Bank

Current Ratio

2.36

2.06

1.641.79

1.61 1.56

0.00

0.50

1.00

1.50

2.00

2.50

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars

Faysal Bank Meezan Bank

2007 2008 2009 2007 2008 2009

Current Assets

138,762,462

135,594,508

176,797,878

66,145,596

83,395,555

121,561,187

Current Liabilities

58,877,320

65,763,583

108,009,079

36,967,002

51,844,228

77,699,058

Current Ratio 2.36 2.06 1.64 1.79 1.61 1.56

Sales to Working Capital = Sales / Working Sales to Working Capital = Sales / Working CapitalCapital

• In this ratio we compare the working capital or net current assets with sales which are part of the revenue.

• Interpretation:• The average turnover in working

capital of Faysal Bank is 19% & Meezan Bank have 20% this shows the profitability of working capital of Meezan Bank is slightly high then Faysal Bank.

Sales To Working Capital Ratio

0.15

0.19

0.25

0.16

0.22 0.23

0.00

0.05

0.10

0.15

0.20

0.25

0.30

2007 2008 2009

Ra

tio Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Sales 11,610,781

13,404,132

16,957,875

4,573,752

6,803,213

10,102,060

Working Capital

79,885,142

69,830,925

68,788,799

29,178,594

31,551,327

43,862,129

Sales To Working Capital 0.15 0.19 0.25 0.16 0.22 0.23

Working Capital = Current Assets – Working Capital = Current Assets – Current LiabilitiesCurrent Liabilities

• Arithmetically it is the difference of Current Assets

and Current Liabilities.

• Interpretation:• The working capital ratio of

Faysal Bank limited is higher which indicates that Faysal bank has have sufficient resources to meets its current obligations as compare to

Meezan Bank Limited.

Working Capital Ratio

0.00

20000000.00

40000000.00

60000000.00

80000000.00

100000000.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Current Assets

138,762,462

135,594,508

176,797,878

66,145,596

83,395,555

121,561,187

Current Liabilities

58,877,320

65,763,583

108,009,079

36,967,002

51,844,228

77,699,058

Working Capital

79885142

69830925

68788799

29178594

31551327

43862129

Leverage RatiosLeverage Ratios• The leverage ratios highlights the organization methods of The leverage ratios highlights the organization methods of

finance as well provide the sketch how well firm have ability finance as well provide the sketch how well firm have ability to meet its financial obligations. Leverage Ratios include the to meet its financial obligations. Leverage Ratios include the combinations of debts, assets, equity, & interest expense. combinations of debts, assets, equity, & interest expense.

The leverage ratios include:The leverage ratios include:

• Time Interest EarnedTime Interest Earned

• Fixed Charges Coverage RatioFixed Charges Coverage Ratio

• Debt RatioDebt Ratio

• Debt to Equity RatioDebt to Equity Ratio

• Current Worth / Net worth RatioCurrent Worth / Net worth Ratio

• Total Capitalization RatioTotal Capitalization Ratio

• Long Term asset to equity capital ratioLong Term asset to equity capital ratio

• Long term Assets versus Long term DebtLong term Assets versus Long term Debt

• Debt Coverage RatioDebt Coverage Ratio

TIE Ratio = EBIT / Interest ChargesTIE Ratio = EBIT / Interest Charges

• EBIT (FBL) = Profit Before Tax + Mark-up/ return/interest expenses

• Net Operating Income of ( MBL ) = Profit Before Tax + Return on deposits and other dues expenses.

• This ratio measures the extent to which operating income can decline before the firm is unable to meet its annual interest cost.

• Interpretation:• Meezan Bank Ratio is higher as

compare to Faysal Bank Limited. This indicates Meezan Bank has higher ability meet its current liability.

T.I.E Ratio

1.401.20

1.10

1.501.30

1.40

0.000.20

0.400.60

0.801.00

1.201.40

1.60

2007 2008 2009

Ra

tio Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

EBIT

10,157,219

10,251,292

13,268,386

3,721,156

4,080,645

6,709,639

Interest or Return on Deposits & other dues Expenses

7,459,392

8,454,755

11,967,885

2,451,968

3,088,334

4,969,916

T.I.E Ratio 1.4 1.2 1.1 1.5 1.3 1.4

Fixed Charges Coverage RatioFixed Charges Coverage Ratio

• Fixed Charges Coverage Ratio= Earnings before Interest and Taxes (EBIT)/

Interest Expense & Return on deposits and other dues expenses( Meezan Bank)

• Net Operating Income of ( MBL ) = Profit Before Tax + Return on deposits and other dues expenses.

• Interpretation:• Meezan Bank has high

fixed charges ratios while the Faysal Bank ratio is low and lower down gradually each year

Fix Charges Coverage Ratio

1.361.21

1.11

1.52

1.32 1.35

0.000.20

0.400.60

0.801.00

1.201.40

1.60

2007 2008 2009

Ra

tio Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Earning Before interest & Taxes

10,157,219

10,251,292

13,268,386

3,721,156

4,080,645

6,709,639

Interest Expenses or Return on deposits and other dues expenses.

7,459,392

8,454,755

11,967,885

2,451,968

3,088,334

4,969,916

Fix Charges Coverage Ratio 1.36 1.21 1.11 1.52 1.32 1.35

Debt Ratio = Total Debt / Total AssetsDebt Ratio = Total Debt / Total Assets

• The debt ratio relatively compares the total debt of company with its total assets, generally called the debt ratio

• Interpretation:• The debt ratio of Faysal

and Meezan Bank almost equal in 2007 & 2008 Meezan Bank debt ratio slightly higher to Faysal bank while in 2008 Faysal bank Debt ratio is little higher then Meezan Bank Ltd.

Debt Ratio

0.89

0.920.93

0.92

0.93 0.93

0.860.87

0.880.89

0.900.91

0.920.93

0.94

2007 2008 2009

Ra

tio

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Total Debt125,120,918

127,469,378

168,082,674

61,471,903

79,301,092

114,997,275

Total Assets

141,277,421

138,241,486

180,865,413

67,178,559

85,276,070

124,181,734

Debt Ratio 0.89 0.92 0.93 0.92 0.93 0.93

Debt to Equity Ratio = Total debt / Total EquityDebt to Equity Ratio = Total debt / Total Equity

• The debt to equity ratio explain the combination of financial structure of company its provides detail equity and debt finance which company utilize to generate the revenue or continue its operation.

• Interpretation:• By calculating the debt to equity

ratio, we came to know that both banks has high debt as compare to equity which through light on

high leverage of banks

Particulars


2007 2008 2009 2007 2008 2009


127,469,378

168,082,674

61,471,903

79,301,092

114,997,275

Total Equity

16,156,503

10,772,108

12,782,739

5,706,656

5,974,978

9,184,459

Debt To Equity Ratio 7.74 11.83 13.15 10.77 13.27 12.52

Debt To Equity Ratio

7.74

11.8313.15

10.77

13.2712.52

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Current Worth to Net worth Ratio = Current Current Worth to Net worth Ratio = Current Worth / Net worth RatioWorth / Net worth Ratio

• Current Worth = Total Current Assets – Total Current Liabilities

• Net Worth = Total Assets - Total

Liabilities

• Interpretation:• By computing the current

worth to net worth ratio, we came to know that Faysal bank has little higher ratio

as compare to Mezeen Bank

Current To Net Worth Ratio

4.94

6.48

5.385.11 5.284.78

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Current Worth79,885,142

69,830,925

68,788,799

29,178,594

31,551,327

43,862,129

Net Worth16,156,503

10,772,108

12,782,739

5,706,656

5,974,978

9,184,459

Current To Net Worth Ratio 4.94 6.48 5.38 5.11 5.28 4.78

Total Capitalization Ratio = Long term debt / Total Capitalization Ratio = Long term debt / long term debt + shareholders' equitylong term debt + shareholders' equity

• Interpretation:• The above calculation

shows that this ratio of Faysal Bank is higher then Meezan Bank.

Total Capitalization Ratio

0.80 0.85 0.82

0.31

0.69

0.43

0.00

0.20

0.40

0.60

0.80

1.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Long Term Debt66,243,598

61,705,795

60,073,595

2,594,583

13,537,509

6,988,196

Long Term Debt+ Shares holders equity

82,400,101

72,477,903

72,856,334

8,301,239

19,512,487

16,172,655

Total Capitalization Ratio 0.80 0.85 0.82 0.31 0.69 0.43

Long Term asset equity capital ratio = Long Term asset equity capital ratio = Long Term Assets Long Term Assets

Equity Capital Equity Capital• This ratio shows the ability

to meet the long term debts

Interpretation: The above calculation shows

the higher equity involve as compare to long term assets. This ratio of both banks is lower, which means they don’t have sufficient long term

assets.

Long Term Assets To Equity Capital Ratio

0.02 0.020.02

0.02

0.02 0.02

0.00

0.01

0.01

0.02

0.02

0.03

0.03

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Long Term Assets 2,514,959 2,646,978 4,067,535

1,032,963

1,880,515 2,620,547

Equity Capital

125,120,918

127,469,378

168,082,674

61,471,903

79,301,092

114,997,275

Long Term asset equity capital 0.02 0.021 0.024 0.017 0.024 0.023

Long term Assets vs. Long term Debt = Long term Assets vs. Long term Debt = Long Term Assets/ Long Term DebtsLong Term Assets/ Long Term Debts

• This ratio assists to determine the debt capacity of bank to its structure of working capital.

Interpretation: The above calculation shows that

Meezan bank have higher ratio of long term assets to meet its long term debt as compare to Faysal Bank which indicate the Meezan Bank have much investment in long term assets as compare to Faysal Bank.

Long Term Assets V/S Long Term Debt Ratio

0.04 0.040.07

0.40

0.14

0.37

0.00

0.10

0.20

0.30

0.40

0.50

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Long Term Assets2,514,959

2,646,978

4,067,535

1,032,963

1,880,515

2,620,547

Long Term Debts66,243,598

61,705,795

60,073,595

2,594,583

13,537,509

6,988,196

Long Term Assets V/S Long Term Debt 0.04 0.04 0.07 0.4 0.14 0.37

Debt Coverage RatioDebt Coverage Ratio = Net Operating = Net Operating Income / Total DebtIncome / Total Debt

This ratio guide us to see ability of company to measures to the interest payment plus principle amount.

Interpretation: The Faysal bank has

higher ratio as compare to Meezan Bank but as we know Meezan Bank is premier Islamic Bank and work on profit and loss base not interest base.

Debt Coverage Ratio

0.08 0.08 0.08

0.060.05

0.06

0.00

0.02

0.04

0.06

0.08

0.10

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Net Operating Income

10,157,219

10,251,292

13,268,386

3,721,156

4,080,645 6,709,639

Total Debts125,120,918

127,469,378

168,082,674

61,471,903

79,301,092

114,997,275

Debt Coverage Ratio 0.08 0.08 0.08 0.06 0.05 0.06

Profitability RatiosProfitability Ratios

• Profitability ratios make us able to access and view the Profitability ratios make us able to access and view the business ability to generate revenue as compare to its business ability to generate revenue as compare to its expenses. These ratios highlight the operational performance expenses. These ratios highlight the operational performance and guide concerning persons and viewers to understanding of and guide concerning persons and viewers to understanding of how the firm utilized its resources to generating profit. how the firm utilized its resources to generating profit.

The Profitability ratios include:The Profitability ratios include:• Gross profit RatioGross profit Ratio• Return on AssetsReturn on Assets• DuPont Return on AssetsDuPont Return on Assets• Operating Income MarginOperating Income Margin• Operating Assets TurnoverOperating Assets Turnover• Return on Operating AssetsReturn on Operating Assets• Sales to Long Term AssetsSales to Long Term Assets• Return on Equity (ROE)Return on Equity (ROE)• Net Profit MarginNet Profit Margin

Gross Profit Ratio = Gross Profit Ratio = Gross Profit x 100Gross Profit x 100 Net Sales Net Sales

• The gross profit ratio shows the how much amount available from the sale to meet the company expenses.

Interpretation:• The Meezan Bank has

higher gross profit ratio as compare to Faysal Bank. The three years average ratio of Faysal bank is 34.03 while Meezan bank has 50.60 %

Gross Profit Margin Ratio

35.75 36.9229.43

46.39

54.6050.80

0.00

10.00

20.00

30.00

40.00

50.00

60.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Gross Profit4,151,389

4,949,377

4,989,990

2,121,784

3,714,879

5,132,144

Net Sales11,610,781

13,404,132

16,957,875

4,573,752

6,803,213

10,102,060

Gross Profit Margin 35.75 36.92 29.43 46.39 54.6 50.8

Return on Assets (ROA) = Profit after Taxation / Return on Assets (ROA) = Profit after Taxation / Average Total assets x 100Average Total assets x 100

• ROA, is percentage value of profit after tax as compare to average total assets of the company. This is an important ratio for companies deciding whether or not to initiate a new project.

• Interpretation: The above calculations shows the

after 2007 this ratio decreased specially the ratio of Faysal bank continuous decreases in the 3 years while Meezan Bank took come back after huge decreasing in the year of 2008.

Return On Assets Ratio

1.77

0.80 0.75

1.70

0.810.98

0.00

0.50

1.00

1.50

2.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Profit After Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

Average Total assets

128,373,000

139,759,454

159,553,450

56,808,780

76,227,315

104,728,902

Return On Assets 1.77 0.8 0.75 1.7 0.81 0.98

DuPont Return on Assets = DuPont Return on Assets = Profit after taxationProfit after taxation x 100 x 100

Total AssetsTotal Assets• This ratio determine the impact of

assets turnover on the on the profit margin.

Interpretation: The Faysal bank ratio in

2007 is higher but its decreased much in 2009 while the Meezan Bank ratio increased after downfall in 2008.

Dupont ROA Ratio

1.61

0.810.66

1.43

0.73 0.83

0.00

0.50

1.00

1.50

2.00

2007 2008 2009

Rat

ioFaysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Profit After Tax2,272,108

1,114,952

1,200,159

963,501

621,187

1,025,351

Total Assets141,277,421

138,241,486

180,865,413

67,178,559

85,276,070

124,181,734

DuPont Return on Assets 1.61 0.81 0.66 1.43 0.73 0.83

Operating Income Margin = Operating Income Margin = Operating IncomeOperating Income x 100 x 100

Net SalesNet Sales

• The operating income margin ratio shows the company operating income by its own operation.

• Interpretation:• The Faysal bank operating

income margin is higher as compare to Meezan which is shown in above calculations.

Operating Income Margin Ratio

87.4876.48 78.2481.36

59.9866.42

0.00

20.00

40.00

60.00

80.00

100.00

2007 2008 2009

Rati

o Faysal Bank

Mezaan Bank

ParticularsFaysal Bank

Meezan Bank

2007 2008 2009 2007 2008 2009

Operating Income 10,157,219 10,251,292

13,268,386 3,721,156 4,080,645 6,709,639

Sales 11,610,781 13,404,13216,957,875 4,573,752 6,803,213 10,102,060

Operating Income Margin 87.48 76.48 78.24 81.36 59.98 66.42

Operating Assets Turnover = Operating Assets Turnover = Operating AssetsOperating Assets x 100 x 100

Net SalesNet Sales

Particulars


2007 2008 2009 2007 2008 2009

Operating Assets 13,095,442 12,451,282 11,723,614 10,406,540 8,989,199 16,064,274

Net Sales 11,610,781 13,404,132 16,957,875 4,573,752 6,803,213 10,102,060

Operating Assets Turnover 112.79 92.89 69.13 227.53 132.13 159.02

Operating Assets Turn Over

112.7992.89

69.13

227.53

132.13159.02

0.00

50.00

100.00

150.00

200.00

250.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Return on Operating Assets Return on Operating Assets = Profit after Taxation x 100= Profit after Taxation x 100

Operating assets Operating assets• The return of operating assets

ratio use to determine activity of those assets, which utilize to generate the revenue. This ratio gives us the result of the ongoing campaign to eliminate unnecessary assets.

• Interpretation: The return of operating

assets of Faysal Bank is higher then Meezan Bank which indicates that Faysal bank is much efficiently use its operating assets.

Return On Operating Assets

17.35

8.9510.249.26

6.91 6.38

0.00

5.00

10.00

15.00

20.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Net Profit After Tax2,272,108

1,114,952

1,200,159 963,501

621,187

1,025,351

Operating Assets13,095,442

12,451,282

11,723,614

10,406,540

8,989,199

16,064,274

Return on Operating Assets 17.35 8.95 10.24 9.26 6.91 6.38

Sales to Fixed Assets = Net Sales / Fixed Sales to Fixed Assets = Net Sales / Fixed Assets Assets

• This ratio is indicates that how much sales are contributed by investment in fixed Assets.

• Interpretation: The sales to fixed assets

ratio indicate that contribution of fixed assets in is higher of Faysal Bank as compare to Meezan Bank Limited.

Sales To Long Term Assets

4.625.06

4.174.43

3.62 3.85

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Net Sales11,610,781

13,404,132

16,957,875

4,573,752

6,803,213

10,102,060

Long Term Assets

2,514,959

2,646,978

4,067,535

1,032,963

1,880,515

2,620,547

Sales to Long Term Assets 4.62 5.06 4.17 4.43 3.62 3.85

Return on Total Equity = Return on Total Equity = Profit after taxationProfit after taxation x 100 x 100

Total EquityTotal Equity• Return on Equity measures the

amount of Net Income earned by utilizing money of Total common equity. It is the most important of the “Bottom line” ratio. By this, we can find out how much the shareholders are going to get for their shares.

Interpretation:• The return on equity falls

after 2007 of both banks but the average return on equity of Meezan Bank is higher then Faysal bank in last three years.

Return On Total Equity

14.06

10.35 9.39

16.84

9.8011.28

0.00

5.00

10.00

15.00

20.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Profit After Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

Total Equity16,156,503

10,772,108

12,782,739 5,719,910 6,341,097 9,090,535

Return on Total Equity 14.06 10.35 9.39 16.84 9.8 11.28

Net Profit margin = Net Profit / Sales x Net Profit margin = Net Profit / Sales x 100100

• Net Profit Margin shows us the net profit that the business is earning per dollar of sales.

• Interpretation: The net profit margin falls down

of both banks after 2007 but the average net profit margin of Meezan bank is higher then the Faysal Bank.

Net Profit Margin

19.57

8.32 7.08

21.07

9.13 10.15

0.00

5.00

10.00

15.00

20.00

25.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Net Profit 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

Sales 11,610,781 13,404,132 16,957,875 4,573,752 6,803,213 10,102,060

Net Profit Margin 19.57 8.32 7.08 21.07 9.13 10.15

Activity RatiosActivity Ratios

• Activity ratio are sometimes are called efficiency ratios. Activity ratio are sometimes are called efficiency ratios.

Activity ratios are concerned with how efficiency the assets of Activity ratios are concerned with how efficiency the assets of

the firm are managed. These ratios express relationship the firm are managed. These ratios express relationship

between level of sales and the investment in various assets between level of sales and the investment in various assets

inventories, receivables, fixed assets etc.inventories, receivables, fixed assets etc.

The Activity ratios include:The Activity ratios include:

Total Asset TurnoverTotal Asset Turnover

Total Asset Turnover = Total Asset Turnover = Total Sales / Total AssetsTotal Sales / Total Assets

• The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in dollars by assets in dollars. Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the

number the better.

Assets Turnover Ratio

0.08

0.100.09

0.07

0.09 0.09

0.00

0.02

0.04

0.06

0.08

0.10

0.12

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Net Sales11,610,781

13,404,132

16,957,875 4,573,752 6,803,213

10,102,060

Total Assets141,277,421

138,241,486

180,865,413

61,471,903

79,301,092

114,997,275

Assets Turnover 0.08 0.1 0.09 0.07 0.09 0.09

Market RatiosMarket Ratios • Market Value Ratios is useful to measures the company Market Value Ratios is useful to measures the company

performance it relates to an observable market value, the stock performance it relates to an observable market value, the stock price, to book values obtained from the firm's financial price, to book values obtained from the firm's financial statements. The Market ratios assist us to quick comparison statements. The Market ratios assist us to quick comparison among the competitors. among the competitors.

• The Market Ratios Include:The Market Ratios Include:1.1. Dividend per Share – DPSDividend per Share – DPS

2.2. Earning Per Share- EPSEarning Per Share- EPS

3.3. Price / Earning RatioPrice / Earning Ratio

4.4. Dividend Payout RatioDividend Payout Ratio

5.5. Dividend YieldDividend Yield

6.6. Book Value per ShareBook Value per Share

Dividend per Share = Dividend per Share = Total amount of DividendTotal amount of Dividend

Number of outstanding shares Number of outstanding shares• Interpretation:• Meezan bank paying

continuously dividend to its share holders in last three years while Faysal bank did not pay dividend in 2009. The average rate of paying dividend is also higher of Meezan bank in last three years.

Particulars


2007 2008 2009 2007 2008 2009

Total Amount of Dividend

709,117

870,266

-

618,070

2,278,180

1,724,087

No. Of Shares529,629

609,091 609,091

492,596 509,005 599,185

D.P.S 1.34 1.43 0 1.25 4.48 2.88

Dividen Per Share Ratio

1.34 1.43

0.00

1.25

4.48

2.88

0.00

1.00

2.00

3.00

4.00

5.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Earning Per Share Earning Per Share = = Profit after TaxationProfit after TaxationNumber of SharesNumber of Shares

• Interpretation: The EPS of Faysal bank is

too much higher then Meezan Bank in 2007 as well the average EPS also higher then Meezan bank in last three years.

Earning Per Share

4.29

1.83 1.971.96

1.221.71

0.00

1.00

2.00

3.00

4.00

5.00

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Profit After Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

No. Of Shares 529,629 609,091 609,091 492,596 509,005 599,185

E.P.S 4.29 1.83 1.97 1.96 1.22 1.71

Price / Earning Ratio = Price / Earning Ratio = Stock Price Per ShareStock Price Per Share

Earning Per SharesEarning Per Shares

• Interpretation: The price earning ratio of

Meezan Bank is too much higher then Faysal bank in last three years. One important point is that PE ratio of Faysal bank falls too much in 2008 as compare to 2007.

Price Earning Ratio

15.37

3.44 4.52

15.1217.60

9.20

0.00

5.00

10.00

15.00

20.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Stock Price Per Share 65.94 6.29 8.9 29.64 21.47 15.73

Earning Per share 4.29 1.83 1.97 1.96 1.22 1.71

Price Earning 15.37 3.44 4.52 15.12 17.6 9.2

Dividend Payout Ratio = Dividend Payout Ratio = Dividend per ShareDividend per Share

Earning per Share Earning per Share• The dividend payout ratio is an

indicator of how well earnings support the dividend payment.

• Interpretation:• The dividend payout ratio of

Meezan Bank is higher then Faysal bank in last three years. One important point is that Faysal Bank didn’t pay dividend to its shares holders in 2009.

Dividend Pay Out Ratio

0.310.78

0.00

0.64

3.67

1.68

0.00

1.00

2.00

3.00

4.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Dividend Per Share 1.34 1.43 0 1.25 4.48 2.88

Earning Per Share 4.29 1.83 1.97 1.96 1.22 1.71

Dividend Pay Out 0.31 0.78 0 0.64 3.67 1.68

Dividend Yield = Dividend Yield = Dividend per ShareDividend per Share Share Price Share Price

• Interpretation:

• The dividend yield ratio of Meezan Bank is higher as compare to Faysal Bank in last three years.

Dividend Yield Ratio

0.13 0.14

0.00

0.13

0.45

0.29

0.00

0.10

0.20

0.30

0.40

0.50

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Dividend Per Share 1.34 1.43

- 1.25 4.48 2.88

Earning Per Share 10 10 10 10 10 10

Dividend Yields 0.134 0.143 0 0.125 0.448 0.288

Book Value per ShareBook Value per Share = = Shareholders’ EquityShareholders’ Equity

Share CapitalShare Capital• The book value per share

defined as the common shareholder's Equity divided by the outstanding shares at the end of the most recent fiscal quarter. Comparing the market value to the book value can indicate whether or not the stock in overvalued or undervalued.

Book Value Per Share

3.05

2.03 2.10

1.511.29 1.37

0.000.50

1.001.502.002.50

3.003.50

2007 2008 2009

Rati

o

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Share Holders Equity

16,156,503

10,772,108

12,782,739

5,719,910

6,341,097

9,090,535

Shares Capital5,296,445

5,296,445

6,090,911

3,779,897

4,925,961

6,650,048

Book Value Per Share 3.05 2.03 2.1 1.51 1.29 1.37

Operating Cash Flow to Total Debt = Operating Cash Flow to Total Debt = Operating Cash Flow/Total DebtOperating Cash Flow/Total Debt

• Interpretation:• The Operating Cash flow

to total debt ratio of Meezan bank is higher then faysal bank. Which indicate that Meezan Bank has much cash in operation as compare to Faysal Bank.

Operating Cash Flow To Total Debt Ratio

0.06

0.01

0.08

0.12

0.04

0.12

0.000.02

0.040.060.080.10

0.120.14

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Operating Cash Flow 7,280,585 1,907,327

13,981,449

7,465,000

3,320,190

13,966,350


127,469,378

168,082,674

61,471,903

79,301,092

114,997,275

0.06 0.01 0.08 0.12 0.04 0.12

Operating Cash Flow per Share = Operating Cash Flow per Share = Operating cash flow / Total SharesOperating cash flow / Total Shares

• Operating Cash Flow per Share:

• This ratio guide to measure the company financial strength. This ratio can be calculated operating cash flow divided by total no. of

common shares. Interpretation:

• The Operating Cash flow to per share ratio of Meezan bank is higher then faysal bank. This is shown in above graph.

Operating Cash Flow To Total share Ratio

13.75

3.13

22.95

15.15

6.52

23.31

0.00

5.00

10.00

15.00

20.00

25.00

2007 2008 2009

Rat

io

Faysal Bank

Mezaan Bank

Particulars


2007 2008 2009 2007 2008 2009

Operating Cash Flow

7,280,585

1,907,327

13,981,449

7,465,000

3,320,190

13,966,350

Total Shares 529,629 609,091 609,091492,596

509,005 599,185

13.75 3.13 22.95 15.15 6.52 23.31

Horizontal Analysis Horizontal Analysis

• When an analyst compares financial information for two or more years for When an analyst compares financial information for two or more years for

a single company, the process is referred to as a single company, the process is referred to as horizontal analysishorizontal analysis, since , since

the analyst is reading across the page to compare any single line item. the analyst is reading across the page to compare any single line item.

Methods of financial statement analysis generally involve comparing Methods of financial statement analysis generally involve comparing

certain information. It is a procedure in fundamental analysis in which is certain information. It is a procedure in fundamental analysis in which is

an analyst compares ratios or line items in a company's financial an analyst compares ratios or line items in a company's financial

statements over a certain period of time. The analyst will use his judgment statements over a certain period of time. The analyst will use his judgment

when choosing a particular timeline; however, the decision is often based when choosing a particular timeline; however, the decision is often based

on the investing time horizon under consideration.on the investing time horizon under consideration.

Income Statement Of Meezan Bank Limited

Horizontal AnalysisDescription 2007 2008 2009 2007 2008 2009

Rs.In ,000 Rs.In ,000

Profit / return earned on financings, investments and placements 4,573,752 6,803,213 10,102,060 100 148.74 220.87

Return on deposits and other dues expensed 2,451,968 3,088,334 4,969,916 100 125.95 202.69

Net spread earned 2,121,784 3,714,879 5,132,144 100 175.08 241.88

Provision against non-performing financings (net) 435,018 428,436 1,430,536 100 98.49 328.85

Provision for diminution in value of investments and impairment 878 288,884 88,640 100 32,902.51 10,095.67

Bad debts written off directly - - - - - -

435,896 717,320 1,519,176 100 164.56 348.52

Net spread after provisions 1,685,888 2,997,559 3,612,968 100 177.80 214.31

OTHER INCOME

Fee, commission and brokerage income 321,685 431,725 529,260 100 134.21 164.53

Dividend income 104,345 243,585 189,973 100 233.44 182.06

Income from dealing in foreign currencies 392,319 304,692 752,904 100 77.66 191.91

Capital gain / (loss) on sale of investments - net 533,093 47,001 76,160 100 8.82 14.29

Unrealised loss on held for trading investments (31,453) (23,014) - 100 73.17 -

Impairment on reclassification of securities from held for trading to available for sale securities - (362,751) - - #DIV/0! -

Other income 27,904 66,670 49,507 100 238.93 177.42

Total other income 1,347,893 707,908 1,597,804 100 52.52 118.54

3,033,781 3,705,467 5,210,772 100 122.14 171.76

OTHER EXPENSES

Administrative expenses 1,755,761 2,626,606 3,530,161 100 149.60 201.06

Other provisions / write offs 5,948 86,263 (60,859) 100 1,450.29 (1,023.18)

Other charges 2,884 287 1,747 100 9.95 60.58

Total other expenses 1,764,593 2,713,156 3,471,049 100 153.76 196.71

1,269,188 992,311 1,739,723 100 78.18 137.07

Extraordinary / unusual items - - -

PROFIT BEFORE TAXATION 1,269,188 992,311 1,739,723 100 78.18 137.07

Taxation - Current 271,452 314,790 1,440,374 100 115.97 530.62

Prior years - - - - - -

Deferred 34,235 56,334 (726,002) 100 164.55 (2,120.64)

305,687 371,124 714,372 100 121.41 233.69

PROFIT AFTER TAXATION 963,501 621,187 1,025,351 100 64.47 106.42

Unappropriated profit brought forward 448,427 1,219,228 570,114 100 271.89 127.14

Profit before appropriations 1,411,928 1,840,415 1,595,465 100 130.35 113.00

Basic and diluted earnings per share 1.96 1.26 1.71 100 64.29 87.24

Balance Sheet Meezan Bank Limited

Horizontal Analysis 2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000 Rs.In ,000

Cash and balances with treasury banks 5,644,028 5,763,710 8,387,432 100 102.12 148.61

Balances with other banks 3,729,549 1,344,974 5,260,467 100 36.06 141.05

Due from financial institutions 8,850,000 18,108,000 34,499,500 100 204.61 389.82

Investments 10,535,186 14,286,949 23,290,309 100 135.61 221.07

Financings 34,576,339 39,768,481 44,188,066 100 115.02 127.80

Operating fixed assets 1,032,963 1,880,515 2,416,375 100 182.05 233.93

Deferred tax asset - - 204,172 - - #DIV/0!

Other assets 2,810,494 4,123,441 5,935,413 100 146.72 211.19

67,178,559 85,276,070 124,181,734 100 126.94 184.85

LIABILITIES

Bills payable 1,192,160 1,057,017 1,249,210 100 88.66 104.79

Due to financial institutions 2,415,606 4,008,496 8,468,425 100 165.94 350.57

Deposits and other accounts 54,582,353 70,233,875 100,333,051 100 128.68 183.82

Sub-ordinate loan - - - - - -

Liabilities against assets subject to finance leases - - - - - -

Deferred tax liabilities 430,377 453,038 - 100 105.27 -

Other liabilities 2,851,407 3,548,666 4,946,589 100 124.45 173.48

61,471,903 79,301,092 114,997,275 100 129.00 187.07

NET ASSETS 5,706,656 5,974,978 9,184,459 100 104.70 160.94

REPRESENTED BY

Share capital 3,779,897 4,925,961 6,650,048 100 130.32 175.93

Reserves 720,785 845,022 1,050,092 100 117.24 145.69

Unappropriated profit 1,219,228 570,114 1,390,395 100 46.76 114.04

5,719,910 6,341,097 9,090,535 100 110.86 158.93

Deficit on revaluation of investments (13,254) (366,119) 93,924 100 2,762.33 (708.65)

5,706,656 5,974,978 9,184,459 100 104.70 160.94

Cash Flow Statement Meezan Bank Limited 2007 2008 2009 2007 2008 2009

CASH FLOW FROM OPERATING ACTIVITIES Rs.In ,000 Horizontal Analysis

Profit before taxation 1,269,188 992,311 1,739,723 100 78.18 137.07

Dividend income (104,345) (243,585) (189,973) 100 233.44 182.06

1,164,843 748,726 1,549,750 100 64.28 133.04

Adjustments for non-cash charges

Depreciation 124,420 210,095 307,438 100 168.86 247.10

Amortisation 14,282 21,909 31,853 100 153.40 223.03

Provision against non-performing financings (net) 435,018 428,436 1,430,536 100 98.49 328.85

Provision for diminution in the value of investments on associates - listed - 287,046 - - - -

on associates - unlisted 878 1,838 - 100 209.34 -

on others - - 88,640 - - 100.00

Loss on reclassification of securities from held for trading to available for sale securities - 362,751 - - - -

Gain on sale of fixed assets (6,173) (12,744) (13,123) 100 206.45 212.59

Gain on securities with deferred purchase commitments - (23,014) - - 100.00 -

Unrealised loss on held for trading investments 31,453 23,014 - 100 73.17 -

599,878 1,299,331 1,845,344 100 216.60 307.62

1,764,721 2,048,057 3,395,094 100 116.06 192.39

(Increase) / decrease in operating assets

Due from financial institutions (5,150,000) (9,258,000) (16,391,500) 100 179.77 318.28

Held for trading securities (121,122) (51,142) 151,096 100 42.22 (124.75)

Financings (7,980,341) (5,620,578) (6,089,871) 100 70.43 76.31

Other assets (761,301) (1,289,889) (1,807,316) 100 169.43 237.40

(14,012,764) (16,219,609) (24,137,591) 100 115.75 172.25

Increase / (decrease) in operating liabilities

Bills payable 628,932 (135,143) 192,193 100 (21.49) 30.56

Due to financial institutions (1,869,606) 1,592,890 4,459,929 100 (85.20) (238.55)


Other liabilities 843,944 386,904 251,999 100 45.84 29.86

19,736,182 17,496,173 35,003,297 100 88.65 177.36

7,488,139 3,324,621 14,260,800 100 44.40 190.45

Income tax paid (23,139) (4,431) (294,450) 100 19.15 1,272.53

Net cash flow from operating activities 7,465,000 3,320,190 13,966,350 100 44.48 187.09

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in held to maturity securities (300,652) (114,129) 568,481 100 37.96 (189.08)

available for sale securities (6,313,829) (4,196,312) (9,042,992) 100 66.46 143.23

listed associated undertakings (973,726) (451,367) - 100 46.35 -

Unlisted associated undertakings (3,000) 100 - -

Dividends received 101,745 243,541 185,317 100 239.36 182.14

Investments in operating fixed assets (643,739) (1,096,419) (892,838) 100 170.32 138.70

Sale proceeds of property and equipment disposed off 9,509 29,607 30,810 100 311.36 324.01

Net cash flow from investing activities (8,123,692) (5,585,079) (9,151,222) 100 68.75 112.65

CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid - (4) - - 100.00 -

Proceeds from right issue - 1,724,087 - 100.00 -

- (4) 1,724,087 - 100.00 -

Net increase / (decrease) in cash and cash equivalents (658,692) (2,264,893) 6,539,215 100 343.85 (992.76)

Cash and cash equivalents as at January 1 10,032,269 9,373,577 7,108,684 100 93.43 70.86

Cash and cash equivalents as at December 31 9,373,577 7,108,684 13,647,899 100 75.84 145.60

Income Statement Faysal Bank Limited Horizontal Analysis

Description 2007 2008 2009 2007 2008 2009

Rs.In ,000

11,610,781 13,404,132 16,957,875 100 115.45 146.05

Mark-up / return / interest earned 7,459,392 8,454,755 11,967,885 100 113.34 160.44

Mark-up / return / interest expensed 4,151,389 4,949,377 4,989,990 100 119.22 120.20

Net mark-up / interest income 1,797,432 1,561,016 1,966,414 100 86.85 109.40

Provision against non-performing loans and advances 74,537 (104,822) (26,723) 100 (140.63) (35.85)

(Reversal) / Provision for consumer loans - general 207,075 591,168 252,192 100 285.48 121.79

Provision for diminution in the value of investments Bad debts written off directly - - - - - -

Grand Total 2,079,044 2,047,362 2,191,883 100 98.48 105.43

Net mark-up / interest income after provisions 2,072,345 2,902,015 2,798,107 100 140.04 135.02

Non mark-up / interest income


Dividend income 1,221,217 1,207,366 667,926 100 98.87 54.69


(Loss) / Gain on sale of securities 1,115,613 (133,881) 824,621 100 (12.00) 73.92

Unrealized (loss) / gain on revaluation of investments classified as held for trading 2,984 (3,410) (45,674) 100 (114.28) (1,530.63)

Other income 43,821 79,403 80,591 100 181.20 183.91

Total non mark-up / interest income 3,441,145 2,310,593 2,813,065 100 67.15 81.75

5,513,490 5,212,608 5,611,172 100 94.54 101.77

Non mark-up / interest expenses

Administrative expenses 2,799,747 3,257,843 4,284,086 100 116.36 153.02

Other provisions 6,061 96,864 (6,444) 100 1,598.15 (106.32)

Other charges 9,855 61,364 33,029 100 622.67 335.15

Total non mark-up / interest expenses 2,815,663 3,416,071 4,310,671 100 121.32 153.10

2,697,827 1,796,537 1,300,501 100 66.59 48.21

Extraordinary items / unusual items - - -

Profit before taxation 2,697,827 1,796,537 1,300,501 100 66.59 48.21

Taxation – Current 282,381 155,956 1,157,443 100 55.23 409.89

Prior years (48,433) 100,000 2,823,492 100 (206.47) (5,829.69)

Deferred 191,771 425,629 (3,880,593) 100 221.95 (2,023.56)

425,719 681,585 100,342 100 160.10 23.57

Profit after taxation 2,272,108 1,114,952 1,200,159 100 49.07 52.82

Basic and diluted earnings per share - Rupees 4.29 1.83 1.97

Balance Sheet Faysal Bank Limited Horizontal Analysis

2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000

Cash and balances with treasury banks 6,872,032 8,927,524 8,427,202 100 129.91 122.63

Balances with other banks 3,708,451 876,780 508,795 100 23.64 13.72

Lending's to financial institutions 7,078,102 2,861,401 15,017,826 100 40.43 212.17

Investments 31,553,108 30,186,168 56,531,338 100 95.67 179.16

Advances 87,346,401 89,758,789 91,346,001 100 102.76 104.58

Operating fixed assets 2,514,959 2,646,978 2,787,617 100 105.25 110.84

Deferred tax assets - net - - 1,279,918 - - 100.00

Other assets 2,204,368 2,983,846 4,966,716 100 135.36 225.31

141,277,421 138,241,486 180,865,413 100 97.85 128.02

LIABILITIES

Bills payable 2,406,927 1,536,517 1,465,451 100 63.84 60.88

Borrowings from financial institutions 9,995,855 13,027,468 34,985,766 100 130.33 350.00


Sub-ordinated loans 1,000,000 999,600 999,200 100 99.96 99.92

Liabilities against assets subject to finance lease 7,827 4,103 - 100 52.42 -

Deferred tax liabilities - net 2,691,466 2,483,355 - 100 92.27 -

Other liabilities 6,951,421 6,641,542 6,977,069 100 95.54 100.37

125,120,918 127,469,378 168,082,674 100 101.88 134.34

NET ASSETS 16,156,503 10,772,108 12,782,739 100 66.67 79.12

REPRESENTED BY

Share capital 5,296,445 5,296,445 6,090,911 100 100.00 115.00

Reserves 3,567,033 3,790,023 4,030,056 100 106.25 112.98

Unappropriated profit 1,481,668 1,049,519 1,215,179 100 70.83 82.01

10,345,146 10,135,987 11,336,146 100 97.98 109.58

Surplus on revaluation of assets 5,811,357 636,121 1,446,593 100 10.95 24.89

16,156,503 10,772,108 12,782,739 100 66.67 79.12

Cash Flow Statement Faysal Bank Limited

2007 2008 2009 2007 2008 2009

CASH FLOW FROM OPERATING ACTIVITIES Rs.In ,000 Horizontal Analysis

Profit before taxation 2,645,591 1,808,047 1,300,501 100 68.34 49.16

Less: Dividend income (1,191,521) (1,197,862) (667,926) 100 100.53 56.06

Profit on available for sale securities (1,333,820) (1,766,069) (4,028,665) 100 132.41 302.04

120,250 (1,155,884) (3,396,090) 100 (961.23) (2,824.19)

Adjustments for :

Depreciation / Amortisation 339,198 447,630 610,677 100 131.97 180.04

Provision against non-performing advances 1,797,432 1,561,016 1,966,414 100 86.85 109.40

(Reversal) / Provision for consumer loans - general 74,537 (104,822) (26,723) 100 (140.63) (35.85)

Provision for diminution in value of investments 207,075 591,168 252,192 100 285.48 121.79

Provision for other assets 6,061 96,864 (6,444) 100 1,598.15 (106.32)

Unrealised loss / (gain) on revaluation of held-for-trading financial instruments (2,984) 3,410 45,674 100 (114.28) (1,530.63)

Gain on disposal of fixed assets (3,171) (10,761) (5,788) 100 339.36 182.53

Assets charged off - intangibles

Finance charges on leased assets 725 208 22 100 28.69 3.03

Exchange gain (349,848) (535,801) (89,022) 100 153.15 25.45

2,069,025 2,048,912 2,747,002 100 99.03 132.77

2,189,275 893,028 (649,088) 100 40.79 (29.65)

(Increase) / Decrease in operating assets

Lending's to financial institutions (1,669,897) 3,416,701 (11,856,425) 100 (204.61) 710.01

Held-for-trading securities 26,960 (19,104) (1,410,590) 100 (70.86) (5,232.16)

Advances (14,749,726) (3,868,582) (9,773,624) 100 26.23 66.26

Other assets (662,103) (820,408) (1,449,382) 100 123.91 218.91

(17,054,766) (1,291,393) (24,490,021) 100 7.57 143.60

Increase / (Decrease) in operating liabilities

Bills payable (2,109,198) (870,410) (71,066) 100 41.27 3.37

Borrowings from financial institutions (4,969,182) 3,031,613 21,958,298 100 (61.01) (441.89)

Deposits 27,684,965 713,229 20,878,395 100 2.58 75.41

Other liabilities 1,793,903 (228,085) 132,746 100 (12.71) 7.40

22,400,488 2,646,347 42,898,373 100 11.81 191.51

7,534,997 2,247,982 17,759,264 100 29.83 235.69

Income tax paid (254,412) (340,655) (3,777,815) 100 133.90 1,484.92

Net cash flow from operating activities 7,280,585 1,907,327 13,981,449 100 26.20 192.04

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities and associates (7,416,149) 3,778,490 (23,588,302) 100 (50.95) 318.07

Net investments in held-to-maturity securities - (8,805,245) 5,250,017 100.00 (59.62)

Dividends received 1,198,318 1,183,371 645,201 100 98.75 53.84

Profit received on available for sale securities 1,330,329 1,724,803 3,804,699 100 129.65 286.00

Fixed capital expenditure (634,972) (611,191) (782,371) 100 96.25 123.21

Sale proceeds from disposal of fixed assets 23,378 42,304 36,843 100 180.96 157.60

Net cash flow from investing activities (5,499,096) (2,687,468) (14,633,913) 100 48.87 266.11

CASH FLOW FROM FINANCING ACTIVITIES

Payments of lease obligations (7,562) (3,932) (4,125) 100 52.00 54.55

Sub-ordinated loan 250,000 (400) (400) 100 (0.16) (0.16)

Dividend paid to minority shareholders (24,386) (6,336) - 100 25.98 -

Dividends paid (1,059,941) (1,321,174) (340) 100 124.65 0.03

Net cash used in financing activities (841,889) (1,331,842) (4,865) 100 158.20 0.58

(Decrease) / Increase in cash and cash equivalents 939,600 (2,111,983) (657,329) 100 (224.77) (69.96)

Cash and cash equivalents at beginning of the year as previously reported 10,091,038 11,380,486 9,804,304 100 112.78 97.16

Effects of exchange rate changes on cash and cash equivalents 349,848 535,801 89,022 100 153.15 25.45

Cash and cash equivalents at beginning of the year as restated 10,440,886 11,916,287 9,893,326 100 114.13 94.76

Cash and cash equivalents at end of the year 11,380,486 9,804,304 9,235,997 100 86.15 81.16

Vertical AnalysisVertical Analysis• The term of vertical analysis use to calculates each item on a The term of vertical analysis use to calculates each item on a

single financial statement as a percentage of a total. This term single financial statement as a percentage of a total. This term applies because each year's figures are listed vertically on a applies because each year's figures are listed vertically on a financial statement. The total used by the analyst on the income financial statement. The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is statement is net sales revenue, while on the balance sheet it is total assets. This approach to financial statement analysis, also total assets. This approach to financial statement analysis, also known as known as component percentagescomponent percentages, produces , produces common-size common-size financial statementsfinancial statements. Common-size balance sheets and income . Common-size balance sheets and income statements can be more easily compared, whether across the statements can be more easily compared, whether across the years for a single company or across different company’s years for a single company or across different company’s financial statement item that is used as a base value. For financial statement item that is used as a base value. For example in the income statement, 100% is assigned to net sales example in the income statement, 100% is assigned to net sales with all revenue and expense accounts related to it. Under with all revenue and expense accounts related to it. Under vertical analysis, the statements showing the percentages are vertical analysis, the statements showing the percentages are referred to as Common Size Financial Statements. In the referred to as Common Size Financial Statements. In the balance sheet, the total assets equal 100%. Each asset is stated balance sheet, the total assets equal 100%. Each asset is stated as a percentage of total assets. Similarly, total liabilities and as a percentage of total assets. Similarly, total liabilities and stockholders' equity are assigned 100% with a given liability or stockholders' equity are assigned 100% with a given liability or equity account stated as a percentage of the total liabilities and equity account stated as a percentage of the total liabilities and stockholders' equity.stockholders' equity.

Profit and Loss Account Meezan Bank Limited

Description

2007 2008 2009 2007 2008 2009

Rs.In ,000 Vertical Analysis

Profit / return earned on financings, investments and placements 4,573,752 6,803,213 10,102,060 100 100 100

Return on deposits and other dues expensed 2,451,968 3,088,334 4,969,916 53.6 45.4 49.2

Net spread earned 2,121,784 3,714,879 5,132,144 46 55 51

Provision against non-performing financings (net) 435,018 428,436 1,430,536 9.5 6.3 14.2

Provision for diminution in value of investments and impairment 878 288,884 88,640 0.02 4.2 0.9

Bad debts written off directly - - - - - -

435,896 717,320 1,519,176 9.5 10.5 15.0

Net spread after provisions 1,685,888 2,997,559 3,612,968 36.9 44.1 35.8

OTHER INCOME

Fee, commission and brokerage income 321,685 431,725 529,260 7.03 6.35 5.24

Dividend income 104,345 243,585 189,973 2.28 3.58 1.88

Income from dealing in foreign currencies 392,319 304,692 752,904 8.58 4.48 7.45

Capital gain / (loss) on sale of investments - net 533,093 47,001 76,160 11.66 0.69 0.75

Unrealised loss on held for trading investments (31,453) (23,014) - (0.69) (0.34) -

Impairment on reclassification of securities from held for trading to available for sale securities - (362,751) - - (5.33) -

Other income 27,904 66,670 49,507 0.61 0.98 0.49

Total other income 1,347,893 707,908 1,597,804 29.47 10.41 15.82

3,033,781 3,705,467 5,210,772 66.3 54.5 51.6

OTHER EXPENSES

Administrative expenses 1,755,761 2,626,606 3,530,161 38.39 38.61 34.94

Other provisions / write offs 5,948 86,263 (60,859) 0.13 1.27 (0.60)

Other charges 2,884 287 1,747 0.06 0.00 0.02

Total other expenses 1,764,593 2,713,156 3,471,049 38.58 39.88 34.36

1,269,188 992,311 1,739,723 27.75 14.59 17.22

Extraordinary / unusual items - - -

PROFIT BEFORE TAXATION 1,269,188 992,311 1,739,723 27.75 14.59 17.22

Taxation - Current 271,452 314,790 1,440,374 5.93 4.63 14.26

Prior years - - - - - -

Deferred 34,235 56,334 (726,002) 0.75 0.83 (7.19)

305,687 371,124 714,372 6.68 5.46 7.07

PROFIT AFTER TAXATION 963,501 621,187 1,025,351 21.07 9.13 10.15

Unappropriated profit brought forward 448,427 1,219,228 570,114 9.80 17.92 5.64

Profit before appropriations 1,411,928 1,840,415 1,595,465 30.87 27.05 15.79

Balance Sheet Meezan Bank LimitedDescription 2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000 Vertical Analysis

Cash and balances with treasury banks 5,644,028 5,763,710 8,387,432 8.40 6.76 6.75

Balances with other banks 3,729,549 1,344,974 5,260,467 5.55 1.58 4.24

Due from financial institutions 8,850,000 18,108,000 34,499,500 13.17 21.23 27.78

Investments 10,535,186 14,286,949 23,290,309 15.68 16.75 18.76

Financings 34,576,339 39,768,481 44,188,066 51.47 46.63 35.58

Operating fixed assets 1,032,963 1,880,515 2,416,375 1.54 2.21 1.95

Deferred tax asset - - 204,172 - - 0.16

Other assets 2,810,494 4,123,441 5,935,413 4.18 4.84 4.78

67,178,559 85,276,070 124,181,734 100 100 100

LIABILITIES

Bills payable 1,192,160 1,057,017 1,249,210 1.8 1.2 1.0

Due to financial institutions 2,415,606 4,008,496 8,468,425 3.6 4.7 6.8

Deposits and other accounts 54,582,353 70,233,875 100,333,051 81.2 82.4 80.8

Sub-ordinated loan - - - - - -

Liabilities against assets subject to finance leases - - - - - -

Deferred tax liabilities 430,377 453,038 - 0.6 0.5 -

Other liabilities 2,851,407 3,548,666 4,946,589 4.2 4.2 4.0

61,471,903 79,301,092 114,997,275 91.5 93.0 92.6

NET ASSETS 5,706,656 5,974,978 9,184,459 8.5 7.0 7.4

67,178,559 85,276,070 124,181,734 100.0 100.0 100.0

REPRESENTED BY

Share capital 3,779,897 4,925,961 6,650,048 5.6 5.8 5.4

Reserves 720,785 845,022 1,050,092 1.1 1.0 0.8

Inappropriate profit 1,219,228 570,114 1,390,395 1.8 0.7 1.1

5,719,910 6,341,097 9,090,535 8.5 7.4 7.3

Deficit on revaluation of investments (13,254) (366,119) 93,924 (0.0) (0.4) 0.1

NET ASSETS 5,706,656 5,974,978 9,184,459 8.5 7.0 7.4

Balance Sheet Faysal Bank LimitedDescription 2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000 Vertical Analysis

Cash and balances with treasury banks 6,872,032 8,927,524 8,427,202 4.9 6.5 4.7

Balances with other banks 3,708,451 876,780 508,795 2.6 0.6 0.3

Lending's to financial institutions 7,078,102 2,861,401 15,017,826 5.0 2.1 8.3

Investments 31,553,108 30,186,168 56,531,338 22.3 21.8 31.3

Advances 87,346,401 89,758,789 91,346,001 61.8 64.9 50.5

Operating fixed assets 2,514,959 2,646,978 2,787,617 1.8 1.9 1.5

Deferred tax assets - net - - 1,279,918 - - 0.7

Other assets 2,204,368 2,983,846 4,966,716 1.6 2.2 2.7

141,277,421 138,241,486 180,865,413 100 100 100

LIABILITIES

Bills payable 2,406,927 1,536,517 1,465,451 1.7 1.1 0.8

Borrowings from financial institutions 9,995,855 13,027,468 34,985,766 7.1 9.4 19.3

Deposits and other accounts 102,067,422 102,776,793 123,655,188 72.2 74.3 68.4

Sub-ordinated loans 1,000,000 999,600 999,200 0.7 0.7 0.6

Liabilities against assets subject to finance lease 7,827 4,103 - 0.0 0.0 -

Deferred tax liabilities - net 2,691,466 2,483,355 - 1.9 1.8 -

Other liabilities 6,951,421 6,641,542 6,977,069 4.9 4.8 3.9

125,120,918 127,469,378 168,082,674 88.56 92.21 92.93

16,156,503 10,772,108 12,782,739 11.4 7.8 7.1

100.00 100.00 100.00

REPRESENTED BY

Share capital 5,296,445 5,296,445 6,090,911 3.7 3.8 3.4

Reserves 3,567,033 3,790,023 4,030,056 2.5 2.7 2.2

Unappropriated profit 1,481,668 1,049,519 1,215,179 1.0 0.8 0.7

10,345,146 10,135,987 11,336,146 7 7.33 6.27

Surplus on revaluation of assets 5,811,357 636,121 1,446,593 4.1 0.5 0.8

16,156,503 10,772,108 12,782,739 11.4 7.8 7.1

Profit and Loss Account Faysal Bank Limited

Description 2007 2008 2009 2007 2008 2009

Rs.In ,000 Vertical Analysis

Mark-up / return / interest earned 11,610,781 13,404,132 16,957,875 100.0 100.0 100.0

Mark-up / return / interest expensed 7,459,392 8,454,755 11,967,885 64.2 63.1 70.6

Net mark-up / interest income 4,151,389 4,949,377 4,989,990 35.8 36.9 29.4

Provision against non-performing loans and advances 1,797,432 1,561,016 1,966,414 15.48 11.65 11.60

(Reversal) / Provision for consumer loans - general 74,537 (104,822) (26,723) 0.6 (1) (0.2)

Provision for diminution in the value of investments Bad debts written off directly 207,075 591,168 252,192 1.8 4.4 1.5

- - - 17.91 15.27 12.93

Net mark-up / interest income after provisions 2,079,044 2,047,362 2,191,883 17.8 21.7 16.5

2,072,345 2,902,015 2,798,107

Non mark-up / interest income


Dividend income 1,221,217 1,207,366 667,926 11 9.01 3.94


(Loss) / Gain on sale of securities 1,115,613 (133,881) 824,621 10 (1.00) 4.86

Unrealized (loss) / gain on revaluation of investments classified as held for trading 2,984 (3,410) (45,674) 0 (0.03) (0.27)

Other income 43,821 79,403 80,591 0 0.59 0.48

Total non mark-up / interest income 3,441,145 2,310,593 2,813,065 29.6 17.2 16.6

Non mark-up / interest expenses 5,513,490 5,212,608 5,611,172 47.49 38.89 33.09

Administrative expenses 2,799,747 3,257,843 4,284,086 24.1 24.3 25.3

Other provisions 6,061 96,864 (6,444) 0.1 0.7 (0.0)

Other charges 9,855 61,364 33,029 0.1 0.5 0.2

Total non mark-up / interest expenses 2,815,663 3,416,071 4,310,671 24.3 25.5 25.4

Extraordinary items / unusual items - - - - - -

Profit before taxation 2,697,827 1,796,537 1,300,501 23.2 13.4 7.7

Taxation - Current 282,381 155,956 1,157,443 2.4 1.2 6.8

Prior years (48,433) 100,000 2,823,492 (0.4) 0.7 16.7

Deferred 191,771 425,629 (3,880,593) 1.7 3.2 (22.9)

425,719 681,585 100,342 3.7 5.1 0.6

Profit after taxation 2,272,108 1,114,952 1,200,159 19.57 8.32 7.08

Trend AnalysisTrend Analysis

• A firm's present ratio is compared with its past and expected A firm's present ratio is compared with its past and expected

future ratios to determine whether the company's financial future ratios to determine whether the company's financial

condition is improving or deteriorating over time.condition is improving or deteriorating over time.

• There are several ratios which use in above but there trends There are several ratios which use in above but there trends

are given below:are given below:

Trend analysis

Faysal Bank limited

For the years 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend

a) Liquidity Ratios

Current Ratio 2.36 2.06 1.64

This ratio is lower in 2009 as compare to 2007 & 2008

Sales to Working Capital 0.15 0.19 0.25

Working Capital is gradually improving

Working Capital 79,885,142

69,830,925

68,788,799

Lower liquidity in 2009 as compare to 2007

b) Leverage Ratios

Time Interest Earned1.36 1.21 1.11

TIE Ratio lower down each year

Fixed Charges Coverage1.36 1.21 1.11

Fix Charges coverage Ratio lower down 2009

Debt Ratio0.89 0.92 0.93

Debt Ratio improving and highest in 2009

Debt to Equity 7.74 11.83 13.15

Debt to Equity Ratio Highest in 2009

Current Worth / Net worth 4.94 6.48 5.38 Lowest in 2009

Total Capitalization Ratio 0.8 0.85 0.82 Slightly changed

Fixed Asset to Equity 0.02 0.021 0.024 Highest in 2009

Long term Assets to Long term Debt 0.04 0.04 0.07

Improving each year and highest in 2009

Debt Coverage Ratio 0.08 0.08 0.08 Stable though out years

c) Profitability Ratios

Gross profit Ratio 35.75 36.92 29.43 Lowest in 2009

Return on Assets 1.77 0.80 0.75 Highest in 2007

DuPont Return on Assets 1.61 0.81 0.66

Highest 2007 and lowest 2009

Operating Income 87.48 76.48 78.24 Good ratio highest in 2007

Operating Assets Turn Over 112.79 92.89 69.13 Lowest in 2009

Return on Operating Assets 17.35 8.95 10.24 Lowest in 2009

Sales to Fixed Assets 4.62 5.06 4.17 Higher in 2009

Return on Total Equity 14.06 10.35 9.39

Lower down each year & lowest in 2009

Net Profit Margin19.57 8.32 7.08

Lower in 2008 & lowest in 2009

d) Activity Ratios:

Total Asset Turnover 0.08 0.10 0.09 Higher efficiency since 2008

e) Market Ratios:

Dividend per Share. 1.34 1.43 0.00 Dividend not paid 2009

Earning per Share. 4.29 1.83 1.97 Higher In 2007

Price/ Earning Ratio. 15.37 3.44 4.52 Lower in 2008

Dividend Payout Ratio 0.31 0.78 0.00 Dividend not paid 2009

Dividend Yield Ratio 1.34 1.43 0.00 Dividend not paid 2009

Book Value Per Share. 3.05 2.03 2.10 Highest in 2007

f) Statement of cash flow

Operating Cash flow/ Total Debt 0.06 0.01 0.08 Lower in 2008

Operating Cash Flow per Share 13.75 3.13 22.95 Increased during 2009

Trend analysis

Meezan Bank Limited

For the years 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend

a) Liquidity Ratios

Current Ratio 1.79

1.61

1.56

Highest in 2007

Sales to Working Capital 0.16

0.22

0.23

Improved gradually and higher in 2008 & 2009

Working Capital 29,178,59

4

31,551,32

7

43,862,129

Highest in 2009 and higher in 2008 as compare to 2007

b) Leverage Ratios

Time Interest Earned 1.52 1.32 1.35 Highest in 2007

Fixed Charges Coverage

1.52 1.32 1.35

Highest in 2007 But sufficient and maintained in

2008 & 2009

Debt Ratio 0.92 0.93 0.93 Stables through out years

Debt to Equity 10.77 13.27 12.52 Higher in 2008

Current Worth / Net worth 5.11 5.28 4.78 Lower during 2009

Total Capitalization Ratio0.31 0.69 0.43

Lower in 2007 & highest in 2008

Fixed Asset to Equity0.017 0.024 0.023

Highest in 2008 & higher in 2009

Long term Assets to Long term Debt 0.4 0.14 0.37

Higher in 2007 & 2009

Debt Coverage Ratio 0.06 0.05 0.06 Almost Stable in three years

c) Profitability Ratios

Gross profit Ratio46.39 54.60 50.80

Handsome but highest in 2008

Return on Assets 1.70 0.81 0.98 Lowest in 2008

DuPont Return on Assets 1.43 0.73 0.83 Lower during 2008

Operating Income 81.36 59.98 66.42 Lower efficiency since 2008

Operating Assets Turn Over 227.53 132.13 159.02 Highest efficiency in 2007

Return on Operating Assets 9.26 6.91 6.38

Gradually decreased and lowest in 2009

Sales to Fixed Assets 4.43 3.62 3.85

Higher in 2007 & lowest in 2008

Return on Total Equity 16.84 9.80 11.28

Lower down in 2008 but improved in 2009

Net Profit Margin 21.07 9.13 10.15 Lowest in 2008

d) Activity Ratios:

Total Asset Turnover 0.07 0.09 0.09 Higher in 2008 & 2009

e) Market Ratios:

Dividend per Share. 1.25 4.48 2.88 Highest in 2008

Earning per Share. 1.96 1.22 1.71 Higher In 2007

Price/ Earning Ratio. 15.12 17.60 9.20


Dividend Payout Ratio 0.64 3.67 1.68 Good market perceptions

Dividend Yield Ratio 1.25 4.48 2.88


Book Value Per Share. 1.51 1.29 1.37 Good market perceptions

f) Statement of cash flow

Operating Cash flow/ Total Debt 0.12 0.04 0.12

Lower in 2008

Operating Cash Flow per Share 15.15 6.52 23.31

Highest in 2009 & lowest in 2008

Industry Averages and Industry Averages and Comparisons with CompetitorsComparisons with Competitors

• If we analyze of financial sectors we can say the banking system of Pakistan is If we analyze of financial sectors we can say the banking system of Pakistan is

quite better. The banks are playing important role for the economic quite better. The banks are playing important role for the economic

development in Pakistan. By utilizing the information technology banks are development in Pakistan. By utilizing the information technology banks are

offering valuable & quick services to customers. The information technology offering valuable & quick services to customers. The information technology

bring revolutionary changing in banking sectors internet banking mobile bring revolutionary changing in banking sectors internet banking mobile

banking online fund transfers etc. are the part of these positive changes. banking online fund transfers etc. are the part of these positive changes.

Especially the in private sectors banks provide a lot awareness to its customers. Especially the in private sectors banks provide a lot awareness to its customers.

The financial experts of banks also provide consultancy to its valuable The financial experts of banks also provide consultancy to its valuable

customer to maintain the long term relations with customers & take the customer to maintain the long term relations with customers & take the

competitive advantages. Here I will graphically analyze eight average ratios of competitive advantages. Here I will graphically analyze eight average ratios of

three year of Allied Bank Limited, Bank Al-Falah Limited & Bank Islami, three year of Allied Bank Limited, Bank Al-Falah Limited & Bank Islami,

Which I narrate at the start in the list of competitors.Which I narrate at the start in the list of competitors.

Three Years Average Current Ratio Three Years Average Current Ratio of FBL, MBL, ABL, BAFL & BIPLof FBL, MBL, ABL, BAFL & BIPL

Particulars

Three Years Average Current Ratio of FBL, MBL, ABL, BAFL & BIPL

FBL MBL ABL BAFL BIPL

Current Assets 150,384,949 90,367,446 357,452,752 342,256,053 20,573,626

Current Liabilities 77,549,994 55,503,429 241,226,239 218,340,341 9,238,167

Current Ratio 1.94 1.63 1.48 1.57 2.23

Average Current Ratio of 2007-2008 & 2009

1.941.63 1.48 1.57

2.23

0.00

0.50

1.00

1.50

2.00

2.50

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Three Years Average Working Capital Three Years Average Working Capital of FBL, MBL, ABL, BAFL & BIPLof FBL, MBL, ABL, BAFL & BIPL

Average Working Capital Ratio of 2007-2008 & 2009

0.00

20000000.00

40000000.00

60000000.0080000000.00

100000000.00

120000000.00

140000000.00

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Working Capital of FBL, MBL, ABL, BAFL & BIPL


Current Assets 150,384,949 90,367,446 357,452,752 342,256,053 20,573,626

Current Liabilities 77,549,994 55,503,429 241,226,239 218,340,341 9,238,167

Working Capital 72834955.33 34864016.67 116226513.7 123915712 11335458.33

Three Years Average Sales To Working Three Years Average Sales To Working Capital of FBL, MBL, ABL, BAFL & BIPLCapital of FBL, MBL, ABL, BAFL & BIPL

Average Sales To Working Capital Ratio of 2007-2008 &

2009

0.19 0.21

0.27 0.25

0.13

0.00

0.05

0.10

0.15

0.20

0.25

0.30

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Sales To Working Capital of FBL, MBL, ABL, BAFL & BIPL


Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Working Capital 72,834,955 34,864,017 116,226,514 123,915,712 11,335,458

Sales To Working Capital 0.19 0.21 0.27 0.25 0.13

Three Years Average Debt Ratio Three Years Average Debt Ratio of FBL, MBL, ABL, BAFL & BIPLof FBL, MBL, ABL, BAFL & BIPL

Average Debt Ratio of 2007-2008 & 2009

0.91 0.920.95 0.95

0.80

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Debt Ratio of FBL, MBL, ABL, BAFL & BIPL


Total Debt 140,224,323 85,256,757 344,323,471 337,185,989 18,015,335

Total Assets 153,461,440 92,212,121 364,244,325 355,651,990 22,607,615

Debt Ratio 0.91 0.92 0.95 0.95 0.8

Three Years Average Current To Net Worth Three Years Average Current To Net Worth Ratio of FBL, MBL, ABL, BAFL & BIPLRatio of FBL, MBL, ABL, BAFL & BIPL

Average Current To Net Worth Ratio of 2007-2008 & 2009

5.50 5.015.83

6.71

2.47

0.00

2.00

4.00

6.00

8.00

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Current To Net Worth Ratio of FBL, MBL, ABL, BAFL & BIPL


Current Worth 72,834,955 34,864,017 116,226,514 123,915,712 11,335,458

Net Worth 13,237,117 6,955,364 19,920,854 18,466,001 4,592,280

Current To Net Worth Ratio 5.5 5.01 5.83 6.71 2.47

Three Years Average Gross Profit Ratio Three Years Average Gross Profit Ratio of FBL, MBL, ABL, BAFL & BIPLof FBL, MBL, ABL, BAFL & BIPL

Average Gross Profit Margin Ratio of 2007-2008 & 2009

33.57

51.0746.40

33.09

47.11

0.00

10.00

20.00

30.00

40.00

50.00

60.00

1

Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Gross Profit Ratio of FBL, MBL, ABL, BAFL & BIPL


Gross Profit 4,696,919 3,656,269 14,368,679 10,180,774 669,700

Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Gross Profit Ratio 33.57 51.07 46.4 33.09 47.11

Three Years Average DuPont Return On Three Years Average DuPont Return On Assets Ratio of FBL, MBL, ABL, BAFL & BIPLAssets Ratio of FBL, MBL, ABL, BAFL & BIPL

Average DuPont Return On Assets Ratio of 2007-2008 &

2009

1.00 0.94

1.55

0.50

-1.30-2.00

-1.00

0.00

1.00

2.00

1Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average DuPont Return On Assets Ratio of FBL, MBL, ABL, BAFL & BIPL


Profit After Tax 1,529,073 870,013 5,628,883 1,776,188 -297,508

Total Assets 153,461,440 92,212,121 364,244,325 355,651,990 22,607,615

DuPont Return On Assets 1 0.94 1.55 0.5 -1.3

Three Years Average Net Profit Margin Three Years Average Net Profit Margin Ratio of FBL, MBL, ABL, BAFL & BIPLRatio of FBL, MBL, ABL, BAFL & BIPL

Average Net Profit Margin Ratio of 2007-2008 & 2009

10.93 12.1518.18

5.77

-20.90-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

1Ra

tio

FBL

MBL

ABL

BAFL

BIPL

Particulars

Three Years Average Net Profit Margin Ratio of FBL, MBL, ABL, BAFL & BIPL


Net Profit 1,529,073 870,013 5,628,883 1,776,188 -297,508

Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Net Profit Margin 10.93 12.15 18.18 5.77 -20.9

Conclusion/FindingsConclusion/Findings• Liquidity position of Faysal Bank Limited is higher then Liquidity position of Faysal Bank Limited is higher then

Meezan Bank Limited this indicates that Meezan Bank Meezan Bank Limited this indicates that Meezan Bank Limited has higher leverage. Both financial institutes should Limited has higher leverage. Both financial institutes should improve their current ratio & working capital position in improve their current ratio & working capital position in financial year 2009. The analysis shows that its lower down financial year 2009. The analysis shows that its lower down gradually. gradually.

• Net profit margin of Meezan Bank Limited is higher then Net profit margin of Meezan Bank Limited is higher then

Faysal Bank Limited.Faysal Bank Limited. • Gross profit margin of Meezan Bank Limited is higher then Gross profit margin of Meezan Bank Limited is higher then

Faysal Bank Limited so I would like to suggest Faysal Bank Faysal Bank Limited so I would like to suggest Faysal Bank should improve its Gross Profit margin to meet the expenses should improve its Gross Profit margin to meet the expenses efficiently and set a sight profit for shares holders.efficiently and set a sight profit for shares holders.

Conclusion/FindingsConclusion/Findings The Operating income margin of Faysal Bank Limited is higher The Operating income margin of Faysal Bank Limited is higher

then Meezan Bank Limited which indicates that Faysal Bank then Meezan Bank Limited which indicates that Faysal Bank Limited generates higher income by its own operation as compare Limited generates higher income by its own operation as compare to Meezan Bank Limited.to Meezan Bank Limited.

The Long Term debt to long term liabilities ratio of Meezan Bank The Long Term debt to long term liabilities ratio of Meezan Bank Limited is higher then Faysal Bank Limited because Faysal bank Limited is higher then Faysal Bank Limited because Faysal bank limited employed its funds in short term activities more then limited employed its funds in short term activities more then Meezan Bank LimitedMeezan Bank Limited

Meezan Bank Limited has a good market perception due to Meezan Bank Limited has a good market perception due to continuous declaration of dividends but on the other hand Faysal continuous declaration of dividends but on the other hand Faysal Bank limited did not declared dividend in financial year 2009.Bank limited did not declared dividend in financial year 2009.

The three years average price / earning ratio of Meezan Bank The three years average price / earning ratio of Meezan Bank Limited 13.97 while the Faysal Bank Limited has 7.78 % this Limited 13.97 while the Faysal Bank Limited has 7.78 % this indicates the Meezan Bank Limited has much potential in stock indicates the Meezan Bank Limited has much potential in stock as compare to Faysal Bank Limitedas compare to Faysal Bank Limited. .

The operating cash flow to total debt ratio of Meezan The operating cash flow to total debt ratio of Meezan Bank Limited is little higher then Faysal Bank LimitedBank Limited is little higher then Faysal Bank Limited

RecommendationsRecommendations With the assistance analyses of financial reports I would like to With the assistance analyses of financial reports I would like to

recommend both financial institutes should over come their pit recommend both financial institutes should over come their pit falls, flaws and deficiencies.falls, flaws and deficiencies. Meezan Bank limited should Meezan Bank limited should improve its current ratio. The Meezan Bank Limited Net Profit improve its current ratio. The Meezan Bank Limited Net Profit Margin is higher then Faysal Bank Limited. The Faysal Bank Margin is higher then Faysal Bank Limited. The Faysal Bank Limited should improve its profitability ratio by efficiently use its Limited should improve its profitability ratio by efficiently use its resources. Similarly the price earning ratio & dividend payout resources. Similarly the price earning ratio & dividend payout ratio of Meezan Bank Limited is higher then Faysal Bank this ratio of Meezan Bank Limited is higher then Faysal Bank this highlights good return on investment as well good market highlights good return on investment as well good market perception. Faysal should also pay dividend consistently through perception. Faysal should also pay dividend consistently through generate the profit by improving its operation. I would also like to generate the profit by improving its operation. I would also like to recommend that financial institute should much promote the recommend that financial institute should much promote the business activities and provide financial assistance to industry business activities and provide financial assistance to industry which will be reduce the un employment, inflation and increase which will be reduce the un employment, inflation and increase productivity of Pakistan productivity of Pakistan

Thank YouThank You

Analysis of Meezan & Faysal Bank

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