FIN619 Final Project

V irtual University of Pakistan

Evaluation Sheet for ProjectSpring 2010

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Evaluation scheme

Status

Proposal Writing

Pass

Report writing

Pass

Written Work Status

Pass

Presentation & Viva voceTotal Result

mailto:[email protected]

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Name of Student: Irfan Khan

Student’s ID: mc070402129

Supervisor:

PROJECT ON

FINANCIAL STATEMENT ANALYSIS OF

STANDARD CHARTERED

AND

ASKARI BANK

SUBMITTED BY

IRFAN KHAN

Department of Management Sciences,

Virtual University of Pakistan

SUBMTT TO FIN619vuaccess

SUBMISSION DATE 20/03/2010

CH.M.AZEEM, 05/18/11,

www.vuaccess.blogspot.com

Dedication

I dedicated my internship report

To My Parents, and My Elder Brother,

Whom Prayers always follow me

ACKNOWLEDGMENT

‘In the name of Allah, the most Gracious, the most merciful’

First of all I am thankful to Almighty Allah who gave me knowledge and power to make

me able to complete my Project successfully

I am also thankful to (Department of Administrative Sciences) virtual university of Pakistan Lahore who provide me this opportunity to have an experience in a reputed organization and groom myself for the future professional responsibilities.

Making a Project appeared to be a great experience to me. It added a lot to my knowledge

while I was working on this report. If I say that this report is one of my memorable

experiences in student life, then it would not be wrong.

Completion of Project is not an easy task. It requires continuous hard work and zeal. Completion of this Project would have not been possible with out the support of all

CH.M.AZEEM, 05/18/11,

Dear students, for the sake of writing good result, visit www.vuaccess.blogspot.com, there are lot of information regarding to reports and projects, so for guideline purpose you could visit this website and then write your report


EXECUTIVE SUMMARY

This project have better understanding and have information about certain condition of both companies Standard Chartered and Askari Bank . In this project we could see both companies strength and weakness and will make some forecasting to get pure finding of both companies have take ratio analysis to reach the root of companies financial strength. My project is enable to explore both companies under below aspects

A) Solvency-

1) Long term

2) Short term

3) Immediate

B) Stability

C) Profitability

D) Operational efficiency

E) Credit standing

F) Structural analysis

G) Effective utilization of resources

H) Leverage or external financing

So my study regarding to both companies financial ratios are very useful for understanding both companies current position. Because my project help in understanding the liquidity and short-term solvency of the firm, predominantly for trade creditors and banks. You could see in the next page that I have take analysis through both company financial ratio and then make some interruptions and comments over the both companies. My project is also disclosing the internal structure of the both firms; it shows the relationship between sales and each income statement account. Lets go to see the project finding.



DEAR STUDENTS AS YOU KNOW VIRTUAL UNIVERSITY IS DELIVERING QUALITY OF EDUCATION AT YOUR DOOR STEP, THOSE STUDENTS, WHO ARE GOING TO WORK ON PROJECT, IS REQUIRED TO STUDY UNDER BELOW VITAL INSTRUCTIONS

1. How to write a good Proposal

Answer. Many students often fail in the project proposal, because they could not study properly given in LUMS or hands out, Proposal is a project work activities that you are going to do research. I recommended you if you want to write really a good proposal then visit under below blog or website, where you could find important information about how to write a good Proposal,

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2. How to Work on Project

As I have told you, those students that are going to work on final projects, are required to visit once time above site, this is good for final projects, and internship reports, a lot of information are available on this site regarding to Final projects

Dear students your work is evaluated and necessary mistake are highlighted

TABLE OF CONTENT

EXECUTIVE SUMMARY.............................................................................................5INTRODUCTION..........................................................................................................8Background of the project:....................................................................................8BANKING AND FINANCIAL SECTOR IN PAKISTAN...........................................9THE BANKING SECTOR............................................................................................9ESTABLISHING DIFFERENT INSTITUTIONS.....................................................10COMMMERCIAL BANK IN PAKISTAN..................................................................12CURRENT SITUATION IN PAKISTAN...................................................................14COMPANY’S INTRODUCTION...............................................................................15


INTRODUCTION TO STANDARD CHARTERED................................................15introduction to askari bank.................................................................................16Objectives..................................................................................................................17Significance...............................................................................................................17Processing and Analysis.......................................................................................17Data Collection.........................................................................................................18Data collection instrument..................................................................................18

DATA ANALYSIS....................................................................................................19Project Proceedings............................................................................................19

Financial Statement analysis..............................................................................20BASED ON FUNCTION:...........................................................................................21Ratio Analysis of both companies.....................................................................23Profitability Ratios:.................................................................................................34Operating Assets of STANDARD CHARTERTED Limited............................40

Market Ratio:.....................................................................................................................43Dividend per Share – DPS:................................................................................................43

Dividend Yield:.........................................................................................................47Operating Cash Flow to Total Debt:.................................................................49Vertical and Horizontal..........................................................................................50Horizontal Analysis.................................................................................................50Vertical Analysis......................................................................................................59Review of Descriptive Information...................................................................69

Dividend per Share – DPS.................................................................................................72Dividend per Share – DPS.................................................................................................74

AS AT 31-3-2002..........................................................................................................76AS AT 31-3-2009..........................................................................................................78SUMMARY OF FINANCIAL POSITION OF Both companies.........................79Conclusion / Findings and recommendation.................................................80Recommendation....................................................................................................82LIMITATIONS OF RATIO ANALYSIS.....................................................................82BIBLIOGRAPHY..........................................................................................................84

INTRODUCTION

Financial statements are a report of a company past financial performance and current financial position. They are designed to provide information on four primary business activities planning, financing, investing and operating activities. Today advanced technology increase the importance of expert financial statement analysis. Analyzing financial statements helps us sort through and evaluate information, focusing attention on reliable information most relevant to companies or business decisions. On the other hand financial statement is broadly classified into two groups internal users, primarily the mangers of the company, are involved in the making operating and strategic decision for the business.

It is open crystal that financial statement analysis deals with the company financial position. Its mean that establishing a meaningful relationship between various items of two financial statement with each other, The main focus of the statement analysis to observed to companies transaction and presenting them in such a way that external user can understand the firm current position. The main them behind this topic is to Assessment of the firms, past, present and future financial condition. The topic is related to explore

Profit and loss account or income statement Balance sheet or Position statement Cash flow statement Statement of retained earnings

We will go widely to say company companies and I will make clear who both companies are performing. By managing flow of funds.

Background of the project:

Dear Students Project Background must not be leave your objective while you are writing project them? How project will be done? What objective are you going to achieve? How it will be achieve? Is your objective are done if your study has finished? Why you are going to study on this topic? Write clearly project draw back and benefits. I recommended you visit this website and read article regarding to project background

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According to my topic, my project major theme to analyze the both companies past, present, and future performance. In this project I will try to company Ratio analysis, I hope it will provide relative measure of the said firm’s position. On the other hand my study aims to spell out the Horizontal analysis and vertical analysis of the firms. Because Horizontal analysis is lead to valuate the company accounts over the year, and the vertical analysis is also concern to company financial statement. My research wills analysis the existing relation between sales and income statement of both. I will spell out the in this study that financial statement and objects of analysis. Financial statement reporting of financing and investing activities occurs at the point in time. I will make clear after research of both companies the four primary finance pillars .e.g financial statement e.g. balance sheet, income statement, the statement of shareholder (owners) equity and statement of cash flows. This project will give you the major portion for study whose Timing of cash flows and analysis, Risk of cash flowsMarket condition of both companies e.g stock Price, Ration analysis,

Introduction of the organization’s business sector:

BANKING AND FINANCIAL SECTOR IN PAKISTAN

We know that at a time of independence Pakistan faced very serous and stringent

circumstances. They were numerous problems including economic instability, scarcity of

resources, non-availability of trained personals and above all the settlement of thousand

of people who migrated to Pakistan, but as the time witnessed. By the Grace of Allah

and by massive hard work and effort we successfully overcame all these hurdles.


THE BANKING SECTOR The underdeveloped banking sector was also one of the major Problems. In March 1947,

there were 487 offices of banks situated in the area which now comprises Pakistan, but soon

after independence may banks closed their branches and offices. On June 30, 1948 there

were only 195 bank branches left in Pakistan. This situation posed a great threat to the

economic Position of Pakistan.

At the time of independence it was decided that Reserve bank of India would continue to

function as the central bank of both Pakistan and India. This decision was taken to smoothly

accomplish different crucial matters such as membership of IMF and WB division of assets,

coinage of new currency etc. The Reserve Bank order of 1947 States those Indian notes

will continue to be legal tender both in Pakistan and India. Bank of India would function as

central bank of Pakistan up till April 1948.

However Reserve Bank of India did not work fairly for Pakistan it refuse making advances

to the Govt: of Pakistan against adhoc securities. Further it withheld Pakistan share of

rupee Rs 750 million in the undivided Indian Government. Considering all this a committee

was setup to formulate a plan for establishment of a central bank. Later the SBP order was

promulgated by the Governor General of Pakistan on 12 May, 1948. The SBP started its

operation on 1st July 1948.

At that time there were only 2 Pakistani banks namely STANDARD CHARTERTED and

Australasia Bank. Rest of the bank either closes their business in Pakistan or greatly

curtailed the scale of their operations. The SBP then took immediate actions to cure the

STANDARD CHARTERTED in all areas. It also helped in the formation of many other

banks and institutions to support economic activities.

ESTABLISHING DIFFERENT INSTITUTIONS

As already stated SBP did great work to provide sound financial base to newly born state.

NBP (National Bank of Pakistan) was established a representative of SBP in 1949. SBP

also played an important role in promoting stock and shares business in Pakistan. The first

stock and share market was established in Karachi. Further the SBP took necessary steps to

liquidate unsound and weak commercial banks in order to reduce likely disturbances.

A banking companies act was passed 1948, that empowered SBP to control operations of

banking companies. Afterwards SBP act 1956 was passed which gave even more powers to

it. It was all due to the massive effort of SBP that by the year 1958 Pakistan has 307 bank

offices as against 195 in 1948. Out of these 307 branches and bank offices, Pakistani banks

offices amounted to 232. The deposit that was just 881 million in July 1948 has risen to

2389 million by 1958. It was also pleasing that Pakistani banks held 60% of the total 2389

million deposits.

The progress continued as the time passed by. Now that we have completed 53 years of our

independence there is a right time to seek lesion from our past and to build plans for the

future.

On the whole our financial sector showed good signs of growth and development in the pas

half century. There are certain disappointments and failures too but these are mostly due to

our political and bureaucratic defaults the major events in the financial sector that took place

since beginning are listed below.

Credit inquiry commission

SBP offices

Rural credit Fund

Banking Publicity board

People credit deptt:

De-monetization

Banking reforms (1972)

Credit control

NDFC and PFC

Nationalization

Interest free Banking

MODARBAS and PTC

State Bank of Pakistan was set up and started functioning from 1st July 1948. Hence the

history of banking system in Pakistan started with the establishment of the State Bank of

Pakistan which was inaugurated by Quaid-e-Azam Mohammad Ali Jinah on 1st July, 1948.

Therefore three banks were established which include Muslim Commercial Bank Ltd.

formed in September 1948. Bank of Bhawalpur in October 1948 and National Bank of

Pakistan in 1949. STANDARD CHARTERTED also transferred its Head Office from

Bombay to Karachi due to partition in August 1947 and it was assisted by the State Bank to

finance domestic trade of the country.

Government of Pakistan (GOP) has introduced a range of reforms in the financial

services sector ornamental the level of autonomy enjoyed by the SBP. The figure of

banks functioning in Pakistan has increased, which in turn has resulted in increased

competition. The banking sector, in general, has shown good progress during the last few

years. During preceding five years, the mutual total assets of domestic banks, showed an

average annual increase of 22 percent, while combined deposits have recorded an

increase of 27 percent per annum. Three major nationalized commercial banks (NCBs)

are still the leading players in the market, controlling about fifty-one percent of the entire

banking sector deposits and fifty percent of advances.

COMMMERCIAL BANK IN PAKISTAN

On JAN 1, 1974 the government of Pakistan decided to nationalize the Pakistani

scheduled banks. The banks nationalization act was promulgated in order to enable the

government to use the economic wealth concentrated in the banks for the macro

economic development and prosperity. Afterwards in accordance with Sec: 15 of the

banks nationalization act 1974 the Pakistan banking council forwarded a plan for the

reorganization of banks. As a result of this the banks Amalgamation scheme was

notified. Under this scheme the small banks were merged with the bigger ones forming

the following 5 unsolicited banking units

National Bank of Pakistan STANDARD CHARTERTED Ltd United Bank Ltd Muslim Commercial Bank Ltd Allied bank of Pakistan Ltd

The functions of commercial bank can be classified as follows:

Primary Functions Secondary Functions Role in economic Development

PRIMARY FUNCTIONS:

Primary functions include those which form the basis of commercial bank operations.

These functions are central in nature and are there core of the while operations of bank.

Primary functions include the following:

1. Acceptance of Deposits:

The fundamental function of a commercial bank is the acceptance of deposits. All other

functions of a commercial bank are based upon this function. Banks accepts deposits

from those who have surplus money in their hands but they are unable to use it in a

profitable way. The commercial bank provides an opportunity to general public to make

good use of their savings by depositing them in the bank. In order to attack general

public and to persuade people to deposit money in bank, three different types of accounts

are maintained by commercial banks.

Current Account Saving accounts Fixed deposits

2. Advancing loans:

Commercial banks may advance loans in any of the following form:

o Overdrafto Discounting Bills of exchangeo Loanso Cash credit

CURRENT SITUATION IN PAKISTAN

According to Central bank of Pakistan a growing and dynamic banking sector is essential

for economic growth in Pakistan , as we know growth in the banking sector and the in the

real economy mutually reinforce each other. On the other hand the banking sector

constitutes the core of financial sector in Pakistan. Private sector investment and

consumption should be seen as the key drivers of the economy and must be supported by

growing financial intermediation and services, including not only banks but also non-

bank financial institutions, and the stock market. The growth in banking system has been

driven by rise in deposits to Rs 4.1 Trillion and advances to Rs 3.3 Trillion. Banks as

profitable ventures have attracted close to over $4 billion of foreign direct investment

during 2008-2008. Almost half the assests of banks are now owned prudent lending

supported by strong regulatory and supervisory framework have lowered net non

performing loans to historical lows.

PAKISTAN,S BANKING INDUSTRY AND THE BROADER FINANCIAL

SECTOR

Pakistan banking industry and the broader financial sector has enormous potential to

support faster economic growth and development. When compared with other emerging

market countries (EMCS) these sectors remain small in relation to the economy. In recent

years a wide range of important structural reforms already have taken place but more

remorse are needed for the banking sector to grow into its full potential for supporting

strong and sustained economic growth and development. The system remains relatively

small in relation to the economy, when compared with other emerging countries in Asia

and around the world. Given that a dynamic and growing financial system is central to a

growing economy, the small size of Pakistan’s financial sector implies that many

financing needs cannot be met and that much of the country’s economic potential remains

unfulfilled. A wide range of important structural reforms already have taken place but

many more remain to be defined and implemented, if the financial sector is to meet its

full potential for supporting strong and sustained economic growth and development.

COMPANY’S INTRODUCTION

INTRODUCTION TO STANDARD CHARTERED

Standard Chartered PLC is listed on both the London Stock Exchange and the Hong Kong Stock Exchange and is consistently ranked in the top 25 among FTSE-100 companies by market capitalization.

Standard Chartered has a history of over 150 years in banking and operates in many of the world's fastest-growing markets with an extensive global network of over 1,400 branches (including subsidiaries, associates and joint ventures) in over 50 countries in the

Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the Americas.

As one of the world's most international banks, Standard Chartered employs 70,000 people, representing over 90 nationalities, worldwide. This diversity lies at the heart of the Bank's values and supports the Bank's growth as the world increasingly becomes one market.

With strong organic growth supported by strategic alliances and acquisitions and driven by its strengths in the balance and diversity of its business, products, geography and people, Standard Chartered is well positioned in the emerging trade corridors of Asia, Africa and the Middle East.

Standard Chartered derives over 90 per cent of profits from Asia, Africa and the Middle East. Serving both Consumer and Wholesale Banking customers worldwide, the Bank combines deep local knowledge with global capability to offer a wide range of innovative products and services as well as award-winning solutions.

Trusted across its network for its standard of governance and corporate responsibility, Standard Chartered takes a long term view of the consequences of its actions to ensure that the Bank builds a sustainable business through social inclusion, environmental protection and good governance.

Standard Chartered is also committed to all its stakeholders by living its values in its approach towards managing its people, exceeding expectations of its customers, making a difference in communities and working with regulators.

introduction to askari bank

Askari Bank Ltd (formerly Askari Commercial Bank) was incorporated in Pakistan on October 9, 1991, as a Public Limited Company. It started its operations during April 1, 1992. The bank principally deals with banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges and its shares are currently the highest quoted from among the new private sector banks in Pakistan.

Askari Bank has expanded into a nationwide presence of 150 branches, and an offshore banking Unit in Bahrain. A shared network of over 1,100 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As on

December 31, 2008, the bank had equity of PKR 12.27 billion and total assets of PKR 182.17 billion, with over 800,000 banking customers, serviced by our 6,808 employees.

Services

Corporate & Investment Banking Personal Banking Mortgage Finance Business Finance Travelers Cheques Profit / Markup Rates on Retail Products Internet banking Askari Bank has also introduced online banking. Customers are able to view their

bank information and use their accounts for money transfer and use other features.

Objectives

Dear students your objectives should be line to your topic and it will be must achieve in the last of the study. How to write a good study objectives, visit this blog and study

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The object of my project is analysis both companies past , current , and future position.

My project aim is to standardize the financial information for comparisons My project will bring out the efficiency of operations of both companies Study will spell out the risk of operation of both companies My study aim is to measure the relationship between resources and financial

flows of both companies After study reader could easily understand the liquidity ration, leverage ratio,

operation ratio, profitability ratio, valuation ratio of both companies Major Objective of my study is to show the financial stability of both companies

Significance

My study of both companies about financial analysis will able to read you about two company’s financial condition


I am trying to elaborate the basic source for these ratios are the company's financial statements that contain figures on assets, liabilities, profits, or losses. Financial ratios are only meaningful when compared with other information.

Here I will try to dig out various financial data, e.g Ratio analysis, cash flow and financial ratio.

Significance of my project stems from the very nature of the financial statements i.e. they are typically lengthy, bulky documents which have a huge array of numbers not gamely understandable.

Fulfill the MBA requirement.

Processing and Analysis

The section is going to cover solid or existing foundations to the study. Quality and value of the research report depends upon how specifically and accurately the data is collected, processed, interpreted and analyzed so that fruitful conclusions may be drawn out of it. It includes:

Data Collection

At the foundation of a research (Project), it canister be important to seem for

documentary sources. It is what some will call: “the review of papers ". And here, I use

the term documentary sources in the widest connotation of this expression certainly; the

goal is not to find only written sources. According to the subject I have chosen for my

project, the tool used for data collection is direct observation of the financial statements

of the banks.

Company profile forms

Company comparison forms

Stock exchange

Internet past articles

The reason of the congregation of documentary sources is to have a enhanced idea of

what have been said or written about my subject. It is not for the rational beauty of the

subject which I should do that. The explore for documentary sources permitted me to set

a more sufficient momentary look at the data you will later gather.

For the sake of further information I have used secondary sources for data collection for

my work, that contain internet and then I use stock exchange for data congregation as the

banks are planned in Lahore stock exchange.

Data collection instrument

At the foundation of a research (Project), it can be central to look for documentary

sources. It is what some will call: “the review of papers ". And here, I use the term

documentary sources in the widest meaning of this term. Indeed, the goal is not to find

only written sources. Most of data like annual repot, income statement will get from

respondent of both companies

DATA ANALYSIS

After getting data from different sources then the data will display on the excel and

following analysis will done

Those variables which will put a significant impact in my study will tested through t- test

so that my finding might be considered as more authentic. Scatter Diagram also will

clarify the important facts.

On the other hand we will use many tools to review a company, I will use of the largely

priceless method for Financial Ratios. Ratios are an analyst’s microscope; they allow us

get a better sight of the firm’s financial health than just looking at the raw financial

statements. Ratios are useful both to internal and outdoor analysts of the firm. For

internal purposes: ratios can be useful in planning for the future, setting goals, and

evaluating the performance of managers. External analysts use ratios to choose whether

to grant credit, to monitor financial performance, to estimate financial performance, and

To decide whether to advance in the company. I will utilize Microsoft Word and

Microsoft Excel work sheets to calculate the different ratios and analysis.

Project Proceedings

My project is covering the essential elements where I will make my finding true and will make you easily understandable for you. My Project is going to pass through:

Project Main Section

o Executive Summary o Instructiono Background of the Projecto Introduction to Organization business sectoro Introduction to Both companies o Objectives and significance of the Project o Data Process and Analysiso Data collection sources o Data collection Instrumentso Samplingo Conclusion, recommendations and Limitation of the study o Bibliography and Appendix

Financial Statement analysis

Liquidity Analysis Ratios

1. Current Ratio2. Quick Ratio3. Net working Capital Ratio4. Sales to working Capital

amara, 07/23/10,

Not required here in project

PROFITABILITY ANALYSIS RATIOS

1. Return on Assets (ROA)2. Return on Equity (ROE)3. Return on Common Equity (ROCE)4. Profit Margin5. Earnings per share (EPS)

ACTIVITY ANALYSIS RATIOS

1. Assets Turnover Ratio2. Accounts Receivable Turnover Ratio3. Inventory Turnover Ratio

CAPITAL STRUCTURE ANALYSIS

1. Debt to Equity Ratio2. Interest Coverage Ratio

CAPITAL MARKET ANALYSIS RATIO

1. Price Earnings (PE) Ratio2. Market to Book Ratio3. Dividend Yield4. Dividend Payout ratio

ROA= PROFIT MARGIN X ASSESTA TURN OVER RATIO

1. ROA = Profit margin X Assets Turnover Ratio

BASED ON FUNCTION:

Ratios can also be confidential according to their functions in to liquidity ratios, leverage

ratios, activity ratios, profitability ratios & turnover ratios.

1] Liquidity ratios:

It shows the link connecting the current assets & current liabilities of the concern e.g.

liquid ratios & current ratios.

2] Leverage ratios:

It shows the relationship among proprietors funds & debts used in financing the assets of

the distress e.g. capital gearing ratios, debt equity ratios, & Proprietory ratios.

3] Activity ratios:

It shows relationship among the sales & the assets. It is also branded as Turnover ratios &

output ratios e.g. stock turnover ratios, debtors turnover ratios.

4] Profitability ratios:

a) It shows the relationship among profits & sales e.g. operating ratios, gross profit

ratios, operating net profit ratios, expenses ratios

b) It shows the relationship among profit & investment e.g. return on investment,

return on equity capital.

5] Coverage ratios:

It shows the relationship among the profit on the one hand & the claims of the outsiders

to be salaried out of such profit e.g. dividend payout ratios & debt service ratios.

BASED ON USER:

1] Ratios for short-term creditors:

Current ratios, liquid ratios, stock working capital ratios

2] Ratios for the shareholders:

Return on proprietors fund, return on equity capital

3] Ratios for management:

Return on capital employed, turnover ratios, operating ratios, expenses ratios

4] Ratios for long-term creditors:

Debt equity ratios, return on capital employed, proprietor ratios.

Ratio Analysis of both companies and interruption

STANDARD CHARTERTED

AS AT 31 ST DECEMBER (Rupees in Thousands)

Particular 2007 2008 2009ASSETS:

Cash and balances with treasury banks

26295860 22741035 21521550

Balances with other banks 1628280 1261582 2238182Lending to financial institutions 15225935 31466898 20568064

Investments 40696466 29586663 83784536

Advances 119537015 125601465 124446586

Operating fixed assets 3734139 6995784 3886275Deferred tax assets 3201017 3298730 4159452

Other assets 16992650 19239470 22133748

Total Assets 227311362 240191627 282738393LIABILITIES:

Bills payable 6637388 4296420 4296420

Borrowings 6616065 8695730 8695730Deposits and other accounts 177161630 174551801 174551801

Sub-ordinated loans 1912455 32605787 1710300

Other liabilities 3,219,796 32605787 32605787

Total Liabilities 195547334 252755525 221860038Net Assets 12,265,987 12,971,363 14,949,072

Represented By:

Share capital 38715850 38715850 38715850

Reserves 1653044 1812492 1946365

Un appropriated Profit 2971681 3481778 4003358

Surplus on revaluation of assets-net of Tax

(274265) (1252980) 3080285

Total 43066310 42757140 47745858

ASKARI BANK

AS AT 31 ST DECEMBER (Rupees in Thousands)

Particular 2007 2008 2009ASSETS:

Cash and balances with treasury banks

13,356,055 16,029,635 19,385,843

Balances with other banks 3,497,054 3,954,814 8,364,261Lending to financial institutions 14,444,143 4,479,754 4,614,059

Investments 39,431,005 35,677,755 67,046,033

Advances 100,780,162 128,818,242 135,034,499

Operating fixed assets 5,128,428 8,266,458 9,846,440

Deferred tax assets - - -

Other assets 5,535,038 8,964,480 10,036,311

Total Assets 182,171,885 206,191,138 254,327,446

LIABILITIES:

Bills payable 2,627,051 2,584,828 2,945,670

Borrowings 17,553,525 15,190,148 19,300,163Deposits and other accounts 143,036,707 167,676,572 205,970,227

Sub-ordinated loans 2,997,300 2,996,100 5,994,900

Liabilities against assets subject to finance lease

- - -

Deferred tax liabilities 471,519 12,987 333,925Other liabilities 3,219,796 4,759,140 4,833,489

Total Liabilities 169,905,898 193,219,775 239,378,374

Net Assets 12,265,987 12,971,363 14,949,072

Represented By:

Share capital 3,006,499 4,058,774 5,073,467

Reserves 6,948,336 7,667,141 7,182,987

Un appropriated Profit 2,144,810 308,980 886,234

Equity / Capital fund 12,099,645 12,034,895 13,142,688

Surplus on revaluation of assets-net of Tax

166,342 936,468 1,806,384

Total 12,265,987 12,971,363 14,949,072

PROFIT AND LOSS ACCOUNTS AT 31 ST DECEMBER

(Rupees in Thousands)Particular 2007 2008 2009Mark-up/ return/interest earned 15,143,241 18,393,313 22,661,754

Mark-up/return/ interest expensed 8,685,624 10,650,719 13,629,096

Net mark-up/interest income 6,457,617 7,742,594 9,032,658

Provision against non-performing loans and advances

3,920,240 3,824,778 2,324,377

Provision / (Reversal) for impairment in the value of investments

1,501 508 76,784

Bad debts written off directly - 247,311 –3,921,741 4,072,597 2,914,893

Net mark-up/interest income after provisions

2,535,876 3,669,997 6,117,765

NON MARK-UP/INTEREST INCOMEFee, commission and brokerage income 1,072,868 1,257,584 1,307,699Dividend income 137,079 173,621 162,537Income from dealing in foreign currencies 655,761 873,512 538,445Gain on Sale of Securities –net 2,361,251 36,743 143,717Unrealized gain on revolution of investment classified as held for trading

1,728 22,384 (1,918)

Other income 336,809 343,156 404,221Total non mark-up/interest income 4,565,496 2,707,000 2,554,701Gross Income 7,101,372 6,376,997 8,672,466NON MARK-UP/ INTEREST EXPENSESAdministrative expenses 4,789,536 5,904,169 6,995,857Other provisions/write offs - 459 –Other charges 12,051 10,987 34,368Total non- mark-up/ interest expenses 4,801,587 5,915,615 7,030,225

2,299,785 461,382 1,642,241

Extra ordinary /unusual items - - -PROFIT BEFORE TAXATION 2,299,785 461,382 1,642,241Taxation -Current 98,535 17,363 562,099 -Prior years (233,950) (50,000) 119,827

-Deferred (245,812) 107,794 (147,478(381,277) 75,157 534,448

PROFIT AFTER TAXATION 2,681,012 386,225 1,107,793

Un appropriated Profit Brought Forward 1,799,979 2,144,810 308,980Profit available for appropriation 4,480,991 2,531,035 1,416,773Basic/diluted earning per share-Rupees 6.61 0.95 2.18

1) Current Ratio:

Current Ratio = Current Assets / Current Liabilities

A measure of the quantity to which current assets cover current liabilities (Current Assets

/ Current Liabilities). A high ratio indicates a good opportunity the enterprise can

withdraw current debts. A ratio of 2.0 or higher is a contented financial position for most

enterprises. Current Ratio of both companies and comparison are under below

STANDARD CHARTERTED

ASKARI BANK

Particular 2007 2008 2009Current Assets 123,168,309 157,767,171 172,820,914

Current liabilities 152,352,373 178,029,627 220,078,211

Current ratio 0.808 0.886 0.78

Interpretation and Comments

Standard Chartered

According to given information and after calculating we could see that The current ratio

for the year 2007, 2008 & 2009 is 5.93, 6.18 & 6.55 correspondingly, compared to

standard ratio 6.55 this ratio is poorer which shows low short term liquidity competence

at the same time investment less than sufficient current assets indicate incompetent use of

possessions

Askari Bank

Year 2007 2008 2009

Current Assets 255,545,214 264,617,178 312,874,212

Current Liabilities 43,066,310 42,757,140 47,745,856

Current ratio 5.93 6.18 6.55

amara, 07/23/10,

How did you calculate these amounts of current assets/liabilities? You were required to provide detailed working of these items along with corresponding note # based on which you segregated the items and amount as current and long term

According to my finding and after calculating askari bank current ratio we could see that

ratios for the last 3 years are 0.808, 0.886& 0.78, shows lower standard of 0.078 which

means proficient use of resources but at the risk of little liquidity.

2) Sales to Working Capital:

Working Capital Ratio

Working capital= current asset –current liabilities

STANDARD CHARTERTED

ASKARI BANK


Standard Chartered

According to analysis we could see that liquidity ratio for the years 2007, 2008 & 2009

is 0.38,0.85,1.57 times correspondingly, compared to standard ratio 1.57 this ratio is

poorer which shows low short term liquidity effectiveness at the similar time share less

than plenty current assets mean incompetent use of resources

Working Capital:

Year 2007 2008 2009

Current assets 255,545,214 264,617,178 312,874,212

Current liabilities 95155274 104938111 100006655

Sales to Working

Capital

0.5 times 0.5 times 0.6 times

Year 2007 2008 2009

Sales 21191470 25783871 31046583

Working Capital 15276529 30128884 19741302

Sales to Working 1.38 0.85 1.57

Working Capital = Current Assets – Current Liabilities

A calculate of both a company's capability and its short-term financial health. Optimistic

working capital resources that the company is talented to pay off its short-term

liabilities. Pessimistic working capital way that a company currently is powerless

to meet its short-term liabilities with its current assets (cash, accounts receivable

and inventory).

STANDARD CHARTERTED

ASKARI BANK

Standard Chartered

It is very patent from the above calculations that the working capital of the standard

chartered bank is steadily increasing above the years, which shows superior short term

liquidity competence

Askari Bank

This ratio enlarged to a great extent in 2008, almost double of the year 2008 but later on

in the year 2009 it went losing again.

Year 2007 2008 2009

Current Assets 575611106 671597594 731954693

Current Liabilities 480455832 566659483 631948038

Working Capital 95155274 104938111 100006655

Year 2007 2008 2009

Current Assets 265182551 316972828 335217471

Current Liabilities 249906022 286843944 315476169

Working Capital 15276529 30128884 19741302

b) Leverage Ratios:

On the other hand by using a mixture of assets, debt, and equity, and interest payments,

leverage ratios could be used to recognize a company's talent to gather it long term

financial obligations. Leverage ratios compute the degree of defense of suppliers of long

term funds. The level of leverage depends on a bunch of factors such as accessibility of

collateral, strength of operating cash flow and tax treatments. Thus, investors should be

vigilant about comparing financial leverage between companies from different industries.

Time Interest Earned:

TIE Ratio = EBIT / Interest Charges

The interest treatment ratio shows us how could merely a company is intelligent to reimburse interest expenses associated to the debt they presently have. The ratio is planned to understand the amount of interest due as a function of company’s earnings before interest and taxes (EBIT). This ratio measures the level to which in use income can rebuff before the firm is unable to meet its annual interest cost.

STANDARD CHARTERTED

ASKARI BANK

Year 2007 2008 2009

EBIT 32044524 34298574 48559935

Interest Charges 13204037 19153957 19153957

TIE ratio 2.43 1.79 1.83

Year 2007 2008 2009

EBIT 17798831 21156515 22125914

Interest charges 15232886 16620963 20331194

TIE ratio 1.16 1.27 1.08

amara, 07/23/10,

How did you calculate this income? EBIT for the banks is calculated by adding back mark up / interest expenses in profit before tax


Standard Chartered

According to analysis we could see that company has sheltered their interest fixed cost

2.43 times in 2008, 1.79 times in 2008 and 1.8 times in 2009. So it makes clear that they

have performed well same in 2008 and 2009, on the other hand but has full a different

look in 2008. In 2008 company issued a small high number of long-term loans and does

not have good liquidity position, so their EBIT became tall thus making TIE a little high

as well

Askari Bank

According to above data we can see that, this company has roofed their interest expenses

1.16 times in 2008, 1.27 times in 2008 and 1.08 times in 2009. It means they haven’t

enhanced in the past years.

Debt Ratio:

Debt Ratio is a financial ratio that indicates the entitlement of a company’s assets is

provided via debt. It is the ratio of total debt (the sum of current liabilities and long-term

liabilities) and total assets (the sum of current assets, fixed assets, and other assets such as

'goodwill').

Formula of calculating Debt ratio

Debt Ratio = Total Debt / Total Assets

STANDARD CHARTERTED

ASKARI BANK

Interpretation and Comments:

Standard Chartered

We could see that Standard chartered company is highly leveraged

Askari Bank

We could see that Akari bank is also highly leveraged one

Debt to Equity Ratio:

Debt to Equity Ratio = Total debt / Total Equity

The debt-to-equity ratio (D/E) is a financial ratio representative the relation quantity of

shareholders' fairness and debt used to finance a company's assets. Intimately connected

to leveraging, the ratio is also known as Risk, Gearing or Leverage. The two apparatus

are often taken from the firm's balance sheet or statement of financial position (so-called

book value), but the ratio may also be calculated using market morals for both, if the

Year 2007 2008 2009

Total debt 536848102 628754092 682747953

Total Assets 590291468 691991521 757928,89

Debt Ratio 0.91 0.91 0.9

Year 2007 2008 2009

Total debt 263443596 312675308 331946025

Total Assets 275685541 328895152 348990764

Debt Ratio 0.95 0.95 0.95

company's debt and equity are openly traded, or using a amalgamation of book value for

debt and market value for equity.

STANDARD CHARTERTED

ASKARI BANK


Standard Chartered

According to above data we could see that ratios incessantly lessening in the last three

years.

Askari Bank

After calculating debt ratio we could see that in 2008 ratio was 25.91 and in 2008 ratio

was 24.71 and in 2009 23.72 are the same ratio.

Current Worth / Net worth Ratio:

Year 2007 2008 2009

Total debt 536848102 628754092 682747953

Total Equity 45177664 55063125 71280902

Debt To Equity Ratio 11.88 11.42 9.58

Year 2007 2008 2009

Total debt 263443596 312675308 331946025

Total Equity 10572605 13766673 14608523

Debt To Equity Ratio 25.91 24.71 23.72

Current Worth / Net worth Ratio

We could calculate according to under below formula

Current Worth = Total Current Assets – Total Current Liabilities

Net Worth = Total Assets - Total Liabilities

STANDARD CHARTERTED

ASKARI BANK


STANDARD CHARTERTED

We can observe from the above calculations that this ratios endlessly lessening in the last

three years. In 2009 it was 1.88, in 2009 it was 1.66 and in 2009

ASKARI BANK

Year 2007 2008 2009

Current Worth 95155274 104938111 100006655

Net Worth 53443366 63237429 75180436

Current Worth to Net

worth Ratio

1.88 1.66 1.33

Year 2007 2008 2009

Current Worth 15276529 30128884 19741302

Net Worth 12241945 16219844 17044739

Current Worth to Net

worth Ratio

1.247 1.85 1.15

Above date Analysis shows that this ratio was as high as 1.2 among three years.

However, it declined to 1.15 in the year 2008. In 2008 the ratio somewhat increased to

1.85.

Total Capitalization Ratio:

Total Capitalization Ratio =

Long-term debt / long-term debt + shareholders' equity

The capitalization ratio procedures the debt constituent of a company's capital structure,

or capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to

hold a company's operations and growth. Long-term debt is divided by the sum of long-

term debt and shareholders' equity. This ratio is careful to be one of the more meaningful

of the "debt" ratios - it delivers the key insight into a company's use of leverage.

STANDARD CHARTERTED

ASKARI BANK


STANDARD CHARTERTED

It is clear from the on top of calculations that there is a gradual fall in this ratio over the

years.

ASKARI BANK

The ratios for the last 3 years are 0.56, 0.65 and 0.52. Shows below standard of 2:1

Long term Assets versus Long term Debt:

Long term Assets versus Long term Debt= Long Term Assets/ Long Term Debts

STANDARD CHARTERTED

ASKARI BANK

Debt Coverage Ratio:

Debt Coverage Ratio = Net Operating Income / Total Debt

Year 2007 2008 2009

Long Term debt 56392270 62094609 50799915

Long term debt + Equity 101569934 117157734 122080817

Capitalization Ratio

worth Ratio

0.56 0.53 0.42

Year .2007 2008 2008

Long Term debt 13537574 25831364 16469856Long term debt + Equity 24110179 39598037 31078379Capitalization Ratio

worth Ratio

0.56 0.65 0.52

Year 2007 2008 2009

Long Term Assets 14680362 20393927 25973696

Long term debt 56392270 62094609 50799915

L.T Assets /L.T Debts

Debt:worth Ratio

0.26 0.33 0.51

Year 2007 2008 2009

Long Term Assets 13773293 11922324 10502990

Long term debt 13537574 25831364 16469856

L.T Assets /L.T Debts

worth Ratio

1.01 0.46 0.63

STANDARD CHARTERTED

ASKARI BANK

Profitability Ratios:

Profitability is the net consequence of a number of policies and decisions. This

section of the discusses the dissimilar events of corporate profitability and financial

performance. These ratios, much similar to the equipped performance ratios, give

users a good sympathetic of how well the company utilized its resources in generating

profit and shareholder worth. The long-term profitability of a company is imperative

for both the survivability of the company as well as the benefit established by

shareholders. It is these ratios that can give insight into the all important "profit".

Profitability ratios show the combined effects of liquidity, asset management and debt

on operating results. These ratios observe the profit made by the firm and contrast

these statistics with the size of the firm, the assets employed by the firm or its level of

sales. I am going to analysis

Net Profit Margin:

Net Profit margin = Net Profit / Sales x 100

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

This fringe indicates the profit after all the costs have been incurred it shows that what %

of turnover is represented by the net profit. An increase in the ratios indicates that a firm

is producing higher net profit of sales than before.

STANDARD CHARTERTED

Year 2007 2008 2009

Net Operating Income 12074762 5121453 5655568

Total Debt 536848102 628754092 682747953

Debt Coverage Ratio

Debt:worth Ratio

0.02 0.008 0.0083

Year 2007 2008 2009

Net Operating Income 14574192 15118049 16880487

Total Debt 263443596 312675308 331946025

Debt Coverage Ratio

worth Ratio

0.055321869 0.048350633 0.0508531

ASKARI BANK


STANDARD CHARTERTED

According to above analysis the Net Profit Margin of standard chartered was in 2008 was

8.31%, increase with to 12.1% in 2009 and then reduce to 4% in 2009

ASKARI BANK

According to above analysis the Net Profit Margin Askari bank in 2009 was 29.07%,

decrease to 19.97% in 2009 and then once more increased to 24.66% in 2009

Operating Income Margin:

Operating Income Margin = Operating Income x 100

Net Sales

Operating Income Margin =

Net mark-up / interest income after provisions + Mark-up / return / interest expensed -

Total non mark-up / interest expenses

Year 2007 2008 2008

Net Profit 12700315 10084037 15614020

Sales 43685740 50481021 63305033

Net Profit Margin 29.07% 19.97% 24.66%

Year 2007 2008 2008

Net Profit 1762691 3130229 1301301

Sales 21191470 25783871 31046583

Net Profit Margin 8.31% 12.1% 4%

amara, 07/23/10,

Here you are required to take the amount of “profit available for appropriations”

STANDARD CHARTERTED

ASKARI BANK

Return on Assets:

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

A calculate of a company's profitability, equal to a fiscal year's paycheck alienated by its

total assets, uttered as a percentage. This is an significant ratio for companies decide

whether or not to initiate a new project. The basis of this ratio is that if a company is

going to start a project they imagine to earn a return on it, ROA is the revisit they would

obtain. Simply put, if ROA is above the rate that the company borrows at then the project

should be accepted, if not then it is discarded

STANDARD CHARTERTED

ASKARI BANK

Year 2007 2008 2009

Operating Income 25278799 24275410 37738818

Net Sales 43685740 50481021 63305033

Operating Income

Margin

57.9% 48% 59.6%

Year 2007 2008 2009

Operating Income 14574192 15118049 16880487

Net Sales 21191470 25783871 31046583Operating Income

Margin

0.687738604 0.586337443 0.5437148

Year 2007 2008 2009

Net income 12700315 10084037 15614020

Total Average assets 559592686.5 641141494.5 724959955

ROA 2.27% 1.57% 2.15%

Year 2007 2008 2009

Net income 1762691 3130229 1301301

Total Average assets 137966927.5 302290346.5 338942958ROA 1.27% 1.01% 0.038%


STANDARD CHARTERTED

Return on assets decreased in 2007 and 2008 and it was greatest in year 2008. This

may have occurred as rectangle used more debt financing in 2008 compared to 2007 and

2008 which resulted in more interest cost and brought the Net income down.

.

ASKARI BANK

Return on assets decreased regularly during the years.

Return on Equity (ROE):

Return on Total Equity = Profit after taxation x 10

Total Equity

Return on Equity events the amount of Net Income earned by

utilizing each dollar of Total ordinary equity. It is the most

important of the “Bottom line” ratio. By this, we can find out

how much the shareholders are going to obtain for their

shares. This ratio indicates how profitable a company is by

comparing its net income to its average shareholders' equity.

The return on equity ratio (ROE) measures how much the

shareholders earned for their investment in the company. The

superior the ratio proportion, the more proficient management

is in utilizing its equity base and the better come again is to

investors.

STANDARD CHARTERTED

ASKARI BANK


STANDARD CHARTERTED

According to finding of standard chartered The Return on

Equity was greatest in 2007 but decreased in 2008 and went

down more in 2008. This once more may have happened due

to the issue of more long-term debt in 2007 and 2009.

ASKARI BANK

According to finding of Askari Bank the Return on Equity

was greatest in 2007 but decreased to an degree in the

following years 2007 and 2009. Once again Due to the issue

of additional long-term debt in 2008 and 2009.

DuPont Return on Assets:

DuPont Return on Assets = Profit after taxation x 100

Total

Assets

Year 2007 2008 2009

Net income 12700315 10084037 15614020

Total Equity 45177664 55063125 71280902

ROE 28.11% 18.31% 21.9%

Year 2007 2008 2009

Net income 1762691 3130229 1301301

Total Equity 10572605 13766673 14608523ROE 16.6% 22.5% 8.9%

STANDARD CHARTERTED

ASKARI BANK

Operating Assets Turnover:

Operating Assets Turnover = Operating Assets

x 100

Net Sales

STANDARD CHARTERTED

ASKARI BANK

Year 2007 2008 2009

Operating Assets 51094302 59739440 68041671

Net Sales 21191470 25783871 31046583Operating Assets Turnover

Margin

2.41% 2.31% 2.19%

Year 2007 2008 2009


Net Sales 43685740 50481021 63305033

Operating Assets Turnover

Margin

192.7% 192.7% 174.70%

Year 2007 2008 2009

Net Profit 1762691 3130229 1301301

Total assets 275685541 328895152 348990764

DuPont ROA 0.006 0.009 0.003

Year 2007 2008 2009

Net Profit 12700315 10084037 15614020

Total assets 590291468 691991521 757928389

DuPont ROA 2.15% 1.46% 2.06%

Operating Assets of STANDARD CHARTERTED Limited2007

Operating Assets:

Cash and balances with treasury banks 56533134

Balances with other banks 39307321

Operating fixed assets 15751254

111591709

2008

Operating Assets:




98269620

2009

Operating Assets:




104230302

Operating Assets of ASKARI BANK Limited

2007

Operating Assets:




52114302

2008

Operating Assets:




59739440

2009

Operating Assets:




69151671

Return on Operating Assets:

Return on Operating Assets = Profit after Taxation x 100

Operating

assets

STANDARD CHARTERTED

Year 2007 2008 2009

Net Profit 12700

315

10084037 15614020

Operating Assets 94230

402

97259620 110591707

Return on

Operating Assets

13.48

%

10.37% 11.19%

ASKARI BANK

Year 2007 2008 2009

Net Profit 1762691 3130229 1301301


Return on Operating Assets 0.034 0.052 0.019

Sales to Fixed Assets:

According to above data This ratio shows that how much

sales are sharing by investment in fixed Assets.

Sales to Fixed Assets = Net Sales / Fixed Assets

STANDARD CHARTERTED

ASKARI BANK

Activity Ratios:

Activity ratio are occasionally are called competence ratios.

Activity ratios are concerned with how efficiency the assets of

the firm are managed. These ratios state association flanked

by stage of sales and the investment in various assets

inventories, receivables, fixed assets etc.

Total Asset Turnover:

Total Asset Turnover = Total Sales / Total Assets

The quantity of sales generated for every dollar's worth of

assets. It is intended by separating sales in dollars by assets in

dollars. Asset yield measures a firm's competence at using its

Year 2007 2008 2009

Net Sales 21191470 25783871 31046583

Fixed Assets 10502990 11922324 13773293

Sales to Fixed Assets 2.017 times 2.16 times 2.25 times

Year 2007 2008 2009

Net Sales 43685740 50481021 63305033

Fixed Assets 11954876 13780555 14751252

Sales to Fixed Assets 3.65 times 3.66 times 3.66 times

assets in generating sales or revenue - the senior the number

the enhanced. It also shows pricing policy companies with

low profit margins tend to have high asset turnover,

while those with high profit margins have low asset earnings

STANDARD CHARTERTED

ASKARI BANK


STANDARD CHARTERTED

The Return on Equity was highest in 2007 but decreased in

2008 and went down more in 2009. This again may have

happened due to the issue of more long-term debt in 2008 and

2009

ASKARI BANK

The Return on Equity was highest in 2008 but decreased to a

level in the following years 2008 and 2009.

Market Ratio:

Market worth Ratios recount an apparent market value, the

stock price, to book principles obtained from the firm's

financial statements.

Year 2007 2008 2009

Total Sales 21191470 25783871 31046583

Total Assets 275685541 328895152 348990764

Total Asset Turnover 0.07 0.07 0.08

Year 2007 2008 2009

Total Sales 43685740 50481021 63305033

Total Assets 590291468 691991521 757928389

Total Asset Turnover 0.07 0.07 0.08

Dividend per Share – DPS:

Dividend per Share = Total amount of Dividend

Number of

outstanding shares

Per share capital = 10 per share

Or

No. of shares outstanding = share capital / 10

STANDARD CHARTERTED

Year 2007 2008 2009

Total amount of

Dividend

691350 1381000 2730251

Number of

Shares

690000 690000 759000

Dividend per

Share

1.0019 2.0014 3.597

ASKARI BANK

Year 2007 2008 2009

Total amount of

Dividend

00 00 975000

Number of

Shares

500000 650000 799500

Dividend per

Share

00 00 1.21

Note: There is no dividend paid by the bank in the year 2008

and 2008

Earning Per Share- EPS:

Earning Per Share = Profit after Taxation

Number of Shares

The segment of a company's profit billed to each exceptional

share of ordinary stock. Earnings per share dish up as an

indicator of a company's profitability. Earnings per share are

generally considered to be the single most important variable

in formative a share's price. It is also a major constituent used

to calculate the price-to-earnings evaluation ratio.

STANDARD CHARTERTED

ASKARI BANK

Price / Earning Ratio:

Price / Earning Ratio = Stock Price Per Share

Earning Per Shares

The Price-Earnings Ratio is premeditated by dividing the

current market price per share of the stock by earnings per

share (EPS). (Earnings per share are calculated by dividing

net income by the number of shares outstanding.) The P/E

Ratio shows how much investors are ready to pay per dollar

of current earnings. As such, high P/E Ratios are connected

with growth stocks. (Investors who are willing to pay a

elevated price for a dollar of current earnings perceptibly

imagine high earnings in the future.) In this style, the P/E

Ratio also indicates how luxurious a particular stock is. This

ratio is not significant, however, if the firm has very little or

unenthusiastic earnings. The Price-Earnings Ratio is

premeditated by dividing the current market price per share of

Year 2007 2008 2009

Profit after Taxation 1762691 3130229 1301301

Number of Shares 500000 650000 799500

Earning Per Share 3.525 4.815 1.627

Year 2007 2008 2009

Profit after Taxation 12700315 10084037 15614020

Number of Shares 690000 690000 759000

Earning Per Share 18.41 14.61 20.57

the stock by earnings per share (EPS). (Earnings per share are

calculated by dividing net income by the number of shares

outstanding.) The P/E Ratio indicates how much investors are

enthusiastic to pay per dollar of current earnings. As such,

high P/E Ratios are connected with enlargement stocks.

(Investors who are willing to pay a high price for a dollar of

current earnings perceptibly expect high earnings in the

future.) In this manner, the P/E Ratio also indicates how

expensive a particular stock is. This ratio is not meaningful,

however, if the firm has very small or pessimistic earnings.

STANDARD CHARTERTED

ASKARI BANK


STANDARD CHARTERTED

The standard chartered P/E ratio was 0.54 times in 2009 it

increased additional to as high as 0.68 times in the following

year. However, in 2009 it declined to 0.49 times which is an

shocking signal for the probable investors.

ASKARI BANK

Year 2008 2008 2008

Stock price per share 10 10 10

EPS 3.525 4.815 1.627

Price / Earning Ratio 2.83 2.07 6.14

Year 2008 2008 2008

Stock price per share 10 10 10

EPS 18.41 14.61 20.57

Price / Earning Ratio 0.54 0.68 0.49

Askari bank P/E ratio was 2.83 times in 2008 and lower a little bit

in 2009. However, in 2008 it amplified as much higher than before

to 6.14 times.

Dividend Payout Ratio:

Dividend Payout Ratio = Dividend per Share

Earning per Share

We know that entitlement of earnings paid to shareholders in

dividends. The payout ratio gives an proposal of how well

earnings hold the dividend payments. Older companies lean

to have a greater payout ratio. This ratio identifies the

percentage of earnings (net income) per frequently share

billed to paying cash dividends to shareholders. The dividend

payout ratio is an indicator of how well earnings sustain the

dividend payment.

STANDARD CHARTERTED

ASKARI BANK

Year 2008 2008 2008

DPS 00 00 1.21

EPS 3.525 4.815 1.627

Dividend Payout Ratio 00 00 0.74

Year 2008 2008 2008

DPS 1.0019 2.0014 3.597

EPS 18.41 14.61 20.57

Dividend Payout Ratio 0.0544 0.137 0.175

Dividend Yield:Dividend Yield = Dividend per Share

Share Price

We know that financial ratio that indicates how much a

company pays out in dividends each year virtual to its share

price. In the nonexistence of any capital gains, the dividend

yield is the return on investment for a stock. A stock's

dividend yield is uttered as an yearly percentage and is

calculated as the company's annual cash dividend per share

divided by the current price of the stock. The dividend yield is

found in the stock quotes of dividend-paying companies.

Investors should reminder that stock quotation marks record

the per share dollar amount of a company's latest quarterly

confirmed dividend. This periodical dollar amount is

annualized and compared to the current stock price to produce

the per annum dividend yield, which represents an expected

return.

STANDARD CHARTERTED

Year 2007 2008 2009

DPS 1.0019 2.0014 3.597

Share Price 10 10 10

Dividend Yield 0.10019 0.20014 0.3597

ASKARI BANK

Book Value per Share:

Book Value per Share = Shareholders’ Equity

Share Capital

Common Shareholder's Equity divided by the Shares

exceptional at the end of the most current fiscal quarter. It is

shows worth of the company somewhat comparable to the

paycheck per share, but it relates the stockholder's equity to

the number of shares outstanding, giving the shares a raw

value. Comparing the market worth to the book value could

show whether or not the stock in overestimated or

undervalued.

STANDARD CHARTERTED

ASKARI BANK

f) Statement of cash flow:

Year 2008 2008 2008

Equity 10572605 13766673 14608523

Share Capital 5000000 6500000 7995000

Book Value per Share 2.11 2.11 1.82

Year 2008 2008 2008

Equity 45177664 55063125 71280902

Share Capital 6900000 6900000 7590000

Book Value per Share 6.5 7.98 9.39

Year 2007 2008 2009

DPS 00 00 1.21

Share Price 10 10 10

Dividend Yield 00 00 0.121

Cash flow ratios indicate liquidity, borrowing capacity or

profitability. This section of the financial ratio looks at cash

flow indicators, which focus on the cash being generated in

terms of how much is being generated and the safety net that

it provides to the company. These ratios can give users

another look at the financial health and performance of a

company.

Operating Cash Flow to Total Debt:

Operating Cash Flow to Total Debt = Operating Cash

Flow/Total Debt

This coverage ratio compares a company's operating cash

flow to its total debt, which, for purposes of this ratio, is

defined as the sum of short-term borrowings, the current

portion of long-term debt and long-term debt. This ratio

provides an indication of a company's ability to cover total

debt with its yearly cash flow from operations. The higher the

percentage ratio, the better the company's ability to carry its

total debt.

STANDARD CHARTERTED

ASKARI BANK

Year 2007 2008 2009

Operating Cash flow 17851517 56224065 18231677

Total Debts 536848102 628754092 682747953

Operating Cash Flow to T.Debt 0.033 0.089 0.027

Operating Cash Flow per Share:

Operating Cash Flow per Share = Operating cash flow /

Total Shares

STANDARD CHARTERTED

ASKARI BANK

.

Vertical and Horizontal

The term "trend analysis" refers to the concept of collecting

information and attempting to spot a pattern, or trend, in the

information. In some fields of study, the term "trend analysis"

has more formally-defined meanings. Although trend analysis

Year 2007 2008 2009


Total Shares 500000 650000 799500

Operating Cash Flow per Share 15.70 60.99 3.12

Year 2007 2008 2009


Total Shares 690000 690000 759000

Operating Cash Flow per Share 25.87 81.48 24.02

Year 2007 2008 2009


Total Debts 263443596 312675308 331946025

Operating Cash Flow to T.Debt 0.029 0.126 0.007

is often used to predict future events, it could be used to

estimate uncertain events in the past. Financial statement

information is used by both external and internal users,

including investors, creditors, managers, and executives.

These users must analyze the information in order to make

business decisions, so understanding financial statements is of

great importance. Several methods of performing financial

statement analysis exist. I will discuss two of these methods:

horizontal analysis and vertical analysis.

Horizontal AnalysisMethods of financial statement analysis generally involve

comparing certain information. The horizontal analysis

compares specific items over a number of accounting periods.

For example, accounts payable may be compared over a

period of months within a fiscal year, or revenue may be

compared over a period of several years. It is a procedure in

fundamental analysis in which an analyst compares ratios or

line items in a company's financial statements over a certain

period of time. The analyst will use his or her discretion when

choosing a particular timeline; however, the decision is often

based on the investing time horizon under consideration.

HORIZONTAL ANALYSIS

STANDARD CHARTERTED

BALANCE SHEET

as on dec 31 2007, 2008 & 2009

(Rupees in ‘000’) Horizontal Analysis

2009 2008 2007

ASSETS 2009 2008

Cash and balances

with treasury banks56533134 55487664 46310478 122.07 119.8

Balances with

other banks39307321 27020704 35965048 109.29 75.13

Lending to

financial

institutions

6193787 1628130 6550128 94.56 24.86

Investments 13814592 177942251 119587476 11.552 148.8

Advances 456355507 382172734 349432685 130.6 109.4

Other assets 35419252 27346111 17765291 199.37 153.9

Operating fixed

assets14751252 13780555 11954876 123.39 115.3

Deferred tax asset 11222444 6613372 2725486 411.76 242.6

TOTAL ASSETS 757928389 691991521 590291468 128.4 117.2

LIABILITIES

Bills payable 9944257 15418230 5737457 173.32 268.7

Borrowings from

financial

institutions

46844890 58994609 56392270 83.07 104.6

Deposits and other

accounts597090545 531298127 459140198 130.05 115.7

Sub-ordinate loans 3954925 3100000 0 0 0

Liabilities against

assets subject to

finance lease

Other liabilities 24913236 19943126 15578177 159.92 128

Deferred tax

liability------- ----------- ---------

TOTAL

LIABILITIES682747953 628754092 536848102 127.18 117.1

NET ASSETS 75180436 63237429 53443366 140.67 118.3

REPRESENTED BY

Shareholders Equity

Share capital 7590000 6900000 6900000 110 100

Reserves 24243254 19821455 17802584 136.18 111.3

Unappropriated

profit39447648 28341670 20 475,080 159.92 128

Total equity

attributable to the

equity holders of

the Bank

71280902 55063125 45177664 157.78 121.9

Minority interest 890099 965642 913317 97.458 105.7

Surplus on

revaluation of

assets - net of tax

3009435 7208662 7352385 40.931 98.05

TOTAL EQUITY 75180436 63237429 53443366 140.67 118.3

HORIZONTAL ANALYSIS

STANDARD CHARTERTED

CONSOLIDATED PROFIT & LOSS ACCOUNT

AS ON DEC 31 2007, 2008 & 2009

2009 2008 2007 Horizontal Analysis

(Rupees in ‘000’) 2009 2008

Mark-up / return /

interest earned63,305,033 50,481,021 43,685,740 144.91 115.6

Mark-up / return /

interest expensed26,525,556 19,153,957 13,204,037 200.89 145.1

Net mark-up /

interest income36,779,477 31,327,064 30,481,703 120.66 102.8

Provision against

non-performing

loans and

advances - net

6,904,919 8,238,227 2,863,207 241.16 287.7

Charge / (reversal)

against off-

balance sheet

obligations

372,598 (54,626) (45,438) -820.01 120.2

Charge / (reversal)

of provision

against diminution

in the value of

investments

1,909,887 (84,310) (13,697) -13944 615.5

Bad debts written

off directly---------- ---------- -------------

9,187,404 8,099,291 2,804,072

Net mark-up /

interest income

after provisions

27,592,073 23,227,773 27,677,631 99.691 83.92

Fee, commission

and brokerage

income

4,518,408 3,420,051 3,931,710 114.92 86.99

Income / gain on

investments 2,369,233 2,472,663 1,219,623 194.26 202.7

Income from

dealing in foreign

currencies

2,374,318 1,487,374 1,102,358 215.39 134.9

Gain on

investments in

4,000,330 ------- 0 0 0

associate

Other income 3,116,522 2,643,076 2,235,805 139.39 118.2

Total non-mark-up

/ interest income 16,378,811 10,023,164 8,489,496 192.93 118.1

43,970,884 33,250,937 36,167,127 121.58 91.94

Non mark-up /

interest expense

Administrative

expenses21,348,016 18,297,279 15,425,461 138.39 118.6

Other provisions /

write offs - net200,163 276,111 122,510 163.39 225.4

Other charges 64,751 85,152 54,898 117.95 155.1

Workers welfare

fund323,575

Total non mark-up

/ interest expenses21,936,505 18,106,32 15,602,869 140.59 0

Profit before

taxation22,034,379 15,144,617 18,840,487 116.95 80.38

Taxation

- Current 8,661,15 7,220,717 7,144,846 0 101.1

- Prior years 233,100 1,668,562 (39,067) -596.67 -4271

- Deferred (2,473,891) (3,828,699) (965,607) 256.2 396.5

6,420,359 10,084,037 12,700,315 50.553 79.4

Profit after

taxation15,614,020 10,084,037 12,700,315 122.94 79.4

Attributable to:

Equity holders of

the Bank15,535,011 10,000,231 12,630,259 123 79.18

Minority interest 79,009 83,806 70,056 112.78 119.6

15,614,020 10,084,037 12,700,315 122.94 79.4

Basic and diluted 20.47 13.18 18.30 111.86 72.02

earnings per share

HORIZONTAL ANALYSIS

ASKARI BANK LIMITED

BALANCE SHEET

AS ON DEC 31 2007, 2008 & 2009

Years

(Rupees in ‘000’)Horizontal Analysis

2007 2008 2009

ASSETS 2007 2008 2009

Cash and balances

with treasury

banks

118.41 29436378 27859360 118.41 105.7 100

Balances with

other banks169.5 18380738 12731952 169.5 144.4 100

Lending to

financial

institutions

26.616 3452059 12456653 26.616 27.71 100

Investments 134.46 88491564 56502210 134.46 156.6 100

Advances 132.88 171198992 144999325 132.88 118.1 100

Operating fixed

assets131.14 11922324 10502990 131.14 113.5 100

Deferred tax asset 0 0 0 0

Other assets 159.58 6013097 5633051 159.58 106.7 100

TOTAL

ASSETS126.59 328895152 275685541 126.59 119.3 100

LIABILITIES 0

Bills payable 111.68 4138243 3091135 111.68 133.9 100

Borrowings

from financial

institutions

163.09 21230697 8394130 163.09 252.9 100

Deposits and

other accounts125.56 273173841 239509391 125.56 114.1 100

Sub-ordinate

loans79.798 3220858 3222106 79.798 99.96 100

Liabilities

against assets

subject to

finance lease

0 0 0 0

Deferred tax

liability10.85 1379809 1921338 10.85 71.82 100

Other liabilities 154.56 9531860 7305496 154.56 130.5 100

TOTAL

LIABILITIES126 312675308 263443596 126 118.7 100

NET ASSETS 139.23 16219844 12241945 139.23 132.5 100

REPRESENTED BY

SHAREHOLDERS EQUITY

Share capital 159.9 6500000 5000000 159.9 130 100

Reserves 115.15 2414833 2749533 115.15 87.83 100

Unappropriated

profit122.12 4851840 2823072 122.12 171.9 100

138.17 13766673 10572605 138.17 130.2 100

Surplus on

revaluation of

assets - net of tax

145.94 2453171 1669340 145.94 147 100

TOTAL

EQUITY139.23 16219844 12241945 139.23 132.5 100

HORIZONTAL ANALYSIS

ASKARI BANK LIMITED

PROFIT & LOSS ACCOUNT

AS ON DEC 31 2009, 2008 & 2007

2009 2008 2007 Horizontal Analysis

(Rupees in ‘000’) 2009 2008 2007

Mark-up / return /

interest earned31046583 25783871 21191470 146.51 121.7 100

Mark-up / return /

interest expensed20331194 16620963 15232886 133.47 109.1 100

Net mark-up / interest

income10715389 9162908 5958584 179.83 153.8 100

Provision against non-

performing loans and

advances - net

2035997 2370867 697690 291.82 339.8 100

Provision for

diminution in value of

investment

1479062 0 0 0

Bad debts written off

directly28298 5844 1537 1841.1 380.2 100

3,543,357 2,376,711 699,227 506.75 339.9 100


income after

provisions

7,172,032 6,786,197 5,259,357 136.37 129 100

Non mark-up /

interest income

Fee, commission and

brokerage income 2,539,321 2,429,599 1,804,998 140.68 134.6 100

Dividend income 300,943 64,722 37,393 804.81 173.1 100

Income from dealing in

foreign currencies 914,845 474,510 386,997 236.4 122.6 100

Gain on sale of

securities424,220 2053192 180751 234.7 1136 100

Unrealized loss on

revaluation of

investments classifies

as held for trading

181,571 21530 27599 657.89 78.01 100

Other income 1,247,669 1,031,372 842,099 148.16 122.5 100

Total non-mark-up /

interest income 5,245,427 6,038,466 3,224,639 162.67 187.3 100

12,417,459 12,824,663 8,483,996 146.36 151.2 100

Non mark-up /

interest expense

Administrative

expenses10,741,399 8,272,587 5,874,745 182.84 140.8 100

Provisions against off-

balance sheet

obligations

28,582 6,959 0 0 0 0

Other charges 122,758 9,565 43,306 283.47 22.09 100

Total non mark-up /

interest expenses10,622,739 8289111 5,918,051 179.5 0 100

Profit before taxation 1,794,720 4,535,552 2,565,945 69.944 176.8 100

Taxation 0 0 0

- Current 1730051 1726810 476226

- Prior years 221797 0 100874 219.88 0 100

- Deferred 1014835 321487 427902 237.17 75.13 100

493419 1405323 803254 61.428 175 100

Profit after taxation 1301301 3130229 1962691 66.302 159.5 100

Attributable to:

Unappropriated profit

brought forward4851840 2823072 1886845

Transferred from

surplus on revaluation

of fixed assets - net of

tax

24586 24585 26074 94.293 94.29 100

Profit available for

appropriation6177727 5977886 3675610 168.07 162.6 100

Vertical Analysis

Financial statement scrutiny in which each foyer for each of

the three major categories of accounts (assets, liabilities and

equities) in a balance sheet is represented as a quantity of the

total account. The major recompense of analyzing a balance

sheet in this mode is that the balance sheets of businesses of

all sizes can effortlessly be compared. It also makes it

effortless to see comparative annual changes in one business.

When using vertical analysis, the forecaster calculates each

item on a single financial statement as a fraction of a total.

The term vertical analysis applies because each year's figures

are premeditated vertically on a financial statement. The total

used by the forecaster on the income statement is net sales

revenue, while on the balance sheet it is total assets. This

loom to financial statement analysis, also identified as section

percentages, produces common-size financial statements.

Common-size balance sheets and income statements can be

more simply compared, whether across the years for a

particular company or diagonally different companies.

VERTICAL ANALYSIS

STANDARD CHARTERTED

BALANCE SHEET

AS ON AS ON DEC 31 2007, 2008 & 2009

(Rupees in ‘000’)Vertical Analysis

2009 2008 2007

ASSETS 2009 2008 2007

Cash and

balances with

treasury banks

56533134 55487664 46310478 7.4589 8.019 7.8454

Balances with

other banks39307321 27020704 35965048 5.1862 3.905 6.0928

Lending to

financial

institutions

6193787 1628130 6550128 0.8172 0.235 1.1096

Investments 13814592 177942251 119587476 1.8227 25.71 20.259

Advances 456355507 382172734 349432685 60.211 55.23 59.197

Other assets 35419252 27346111 17765291 4.6732 3.952 3.0096

Operating

fixed assets14751252 13780555 11954876 1.9463 1.991 2.0252

Deferred tax

asset11222444 6613372 2725486 1.4807 0.956 0.4617

TOTAL

ASSETS757928389 691991521 590291468 100 100 100

LIABILITIES

Bills payable 9944257 15418230 5737457 1.312 2.228 0.972

Borrowings

from financial

institutions

46844890 58994609 56392270 6.1806 8.525 9.5533

Deposits and

other accounts597090545 531298127 459140198 78.779 76.78 77.782

Sub-ordinate

loans 3954925 3100000 0 0.5218 0.448

Liabilities

against assets

subject to

finance lease

Other liabilities 24913236 19943126 15578177 3.287 2.882 2.6391

Deferred tax

liability------- ----------- ---------

TOTAL

LIABILITIES682747953 628754092 536848102 90.081 90.86 90.946

NET ASSETS 75180436 63237429 53443366 9.919 9.14 9.054

REPRESENTED BY

Shareholders Equity

Share capital 7590000 6900000 6900000 1.001 1 1.169

Reserves 24243254 19821455 17802584 3.199 2.86 3.016

Unappropriate

d profit39447648 28341670 20 475,080 5.205 4.1 3.287

Total equity

attributable to

the equity

holders of the

Bank

71280902 55063125 45177664 9.405 7.96 7.653

Minority 890099 965642 913317 0.117 0.14 0.155

interest

Surplus on

revaluation of

assets - net of

tax

3009435 7208662 7352385 0.397 1.04 1.246

TOTAL

EQUITY75180436 63237429 53443366 9.919 9.14 9.054

VERTICAL ANALYSIS

STANDARD CHARTERTED

CONSOLIDATED PROFIT & LOSS ACCOUNT

AS ON DEC 31 2007, 2008 & 2009

2009 2008 2007 Vertical Analysis

(Rupees in ‘000’) 2009 2008 2007

Mark-up / return /

interest earned

63,305,033 50,481,021 43,685,740 100 100 100

Mark-up / return /

interest expensed

26,525,556 19,153,957 13,204,037 41.901 37.94 30.225

Net mark-up /

interest income

36,779,477 31,327,064 30,481,703 58.099 62.06 69.775

Provision against

non-performing

loans and

advances - net

6,904,919 8,238,227 2,863,207 10.907 16.32 6.5541

Charge / (reversal)

against off-

balance sheet

obligations

372,598 (54,626) (45,438) 0.5886 -0.108 -0.104

Charge / (reversal)

of provision

against diminution

in the value of

investments

1,909,887 (84,310) (13,697) 3.017 -0.167 -0.031

Bad debts written

off directly

---------- ---------- ------------- 0 0 0

9,187,404 8,099,291 2,804,072 14.513 16.04 6.4187

Net mark-up /

interest income

after provisions

27,592,073 23,227,773 27,677,631 43.586 46.01 63.356

Fee, commission

and brokerage

income

4,518,408 3,420,051 3,931,710 7.1375 6.775 9

Income / gain on

investments

2,369,233 2,472,663 1,219,623 3.7426 4.898 2.7918

Income from

dealing in foreign

currencies

2,374,318 1,487,374 1,102,358 3.7506 2.946 2.5234

Gain on

investments in

associate

4,000,330 ------- 0 6.3191 0.3162 0

Other income 3,116,522 2,643,076 2,235,805 4.923 5.236 5.1179

Total non-mark-

up / interest

income

16,378,811 10,023,164 8,489,496 25.873 19.86 19.433

43,970,884 33,250,937 36,167,127 69.459 65.87 82.789

Non mark-up /

interest expense

Administrative 21,348,016 18,297,279 15,425,461 33.722 36.25 35.31

expenses

Other provisions /

write offs - net

200,163 276,111 122,510 0.3162 0.547 0.2804

Other charges 64,751 85,152 54,898 0.1023 0.169 0.1257

Workers welfare

fund

323,575 0.5111 0 0

Total non mark-up

/ interest expenses

21,936,505 18,106,32 15,602,869 34.652 0 35.716

Profit before

taxation

22,034,379 15,144,617 18,840,487 34.807 30 43.127

Taxation

- Current 8,661,15 7,220,717 7,144,846 0 14.3 16.355

- Prior years 233,100 1,668,562 (39,067) 0.3682 3.305 -0.089

- Deferred (2,473,891) (3,828,699) (965,607) -3.908 -7.584 -2.21

6,420,359 10,084,037 12,700,315 10.142 19.98 29.072

Profit after

taxation

15,614,020 10,084,037 12,700,315 24.665 19.98 29.072

Attributable to:

Equity holders of

the Bank

15,535,011 10,000,231 12,630,259 24.54 19.81 28.912

Minority interest 79,009 83,806 70,056 0.125 0.17 0.16

15,614,020 10,084,037 12,700,315 24.66 20 29.07

Basic and diluted

earnings per share

20.47 13.18 18.30 3.23 2.61 4.189

VERTICAL ANALYSIS

ASKARI BANK LIMITED

BALANCE SHEET

as on dec 31 2008, 2008 & 2008

Years

(Rupees in ‘000’)

Vertical Analysis

2009 2008 2007

ASSETS 2009 2008 2007

Cash and

balances with

treasury banks

32987335 29436378 27859360 9.4522 8.95 10.105

Balances with

other banks

21581043 18380738 12731952 6.1838 5.589 4.6183

Lending to

financial

institutions

3315500 3452059 12456653 0.95 1.05 4.5184

Investments 75973238 88491564 56502210 21.769 26.91 20.495

Advances 192671169 171198992 144999325 55.208 52.05 52.596

Operating

fixed assets

13773293 11922324 10502990 3.9466 3.625 3.8098

Other assets 8989186 6013097 5633051 2.5758 1.828 2.0433

TOTAL

ASSETS

348990764 328895152 275685541 100 100 100

LIABILITIES

Bills payable 3452031 4138243 3091135 0.9891 1.258 1.1213

Borrowings

from financial

institutions

13690222 21230697 8394130 3.9228 6.455 3.0448

Deposits and

other accounts

300732858 273173841 239509391 86.172 83.06 86.878

Sub-ordinate

loans

2571169 3220858 3222106 0.7367 0.979 1.1688

Liabilities

against assets

subject to

finance lease

Deferred tax

liability

208465 1379809 1921338 0.0597 0.42 0.6969

Other liabilities 11291280 9531860 7305496 3.2354 2.898 2.6499

TOTAL

LIABILITIES

331946025 312675308 263443596 95.116 95.07 95.559

NET ASSETS 17044739 16219844 12241945 4.884 4.93 4.441

REPRESENTED BY:

Shareholders Equity

Share capital 7995000 6500000 5000000 2.291 1.98 1.814

Reserves 3166056 2414833 2749533 0.907 0.73 0.997

Unappropriated

profit

3447467 4851840 2823072 0.988 1.48 1.024

14608523 13766673 10572605 4.186 4.19 3.835

Surplus on

revaluation of

assets - net of tax

2436216 2453171 1669340 0.698 0.75 0.606

TOTAL

EQUITY

17044739 16219844 12241945 4.884 4.93 4.441


(Rupees in ‘000’) 2007 2008 2009

Mark-up / return / interest

earned

31046583 25783871 21191470 100 100 100


expensed

20331194 16620963 15232886 65.486 64.46 71.882


income

10715389 9162908 5958584 34.514 35.54 41.23



advances - net

2035997 2370867 697690 6.55 9.195 3.2923

Provision for diminution

in value of investment

1479062 4.76 0 0


directly

28298 5844 1537 0.091 0.023 0.0073

3,543,357 2,376,711 699,227 11.413 9.218 3.2996


income after provisions

7,172,032 6,786,197 5,259,357 23.101 26.32 24.818

Non mark-up / interest

income

Fee, commission and

brokerage income

2,539,321 2,429,599 1,804,998 8.1791 9.423 8.5176

Dividend income 300,943 64,722 37,393 0.9693 0.251 0.1765


foreign currencies

914,845 474,510 386,997 2.9467 1.84 1.8262

Gain on sale of securities 424,220 2053192 180751 1.3664 7.963 0.8529

Unrealized loss on

revaluation of investments

classifies as held for

trading

181,571 21530 27599 0.5848 0.084 0.1302

Other income 1,247,669 1,031,372 842,099 4.0187 4 3.9738

Total non-mark-up /

interest income

5,245,427 6,038,466 3,224,639 16.895 23.42 15.217

12,417,459 12,824,663 8,483,996 1357.3 2703 2192.3


expense

Administrative expenses 10,741,399 8,272,587 5,874,745 5915.8 38424 21286


balance sheet obligations

28,582 6,959 0 2.2908 0.042 0

Other charges 122,758 9,565 43,306 2.3403 0.058 1.343

Total non mark-up /

interest expenses

10,622,739 8289111 5,918,051 85.547 49.87 69.755

Profit before taxation 1,794,720 4,535,552 2,565,945 5.7807 27.29 12.108

Taxation 0 0 0

- Current 1730051 1726810 476226 5.5724 6.697

- Prior years 221797 0 100874 0.7144 0 0.476

- Deferred 1014835 321487 427902 3.2687 1.247 2.0192

493419 1405323 803254 1.5893 5.45 3.7905

Profit after taxation 1301301 3130229 1962691 4.1914 12.14 9.2617

Attributable to:


brought forward

4851840 2823072 1886845

Transferred from surplus

on revaluation of fixed

assets - net of tax

24586 24585 26074 0.0792 0.095 0.123


appropriation

6177727 5977886 3675610 19.898 23.18 17.345

VERTICAL ANALYSIS

ASKARI BANK LIMITED

PROFIT & LOSS ACCOUNT

AS ON DEC 31 2009, 2008 & 2007


(Rupees in ‘000’) 2009 2008 2007


earned31046583 25783871 21191470 100 100 100


expensed20331194 16620963 15232886 65.486 64.46 71.882


income10715389 9162908 5958584 34.514 35.54 41.23



advances - net

2035997 2370867 697690 6.55 9.195 3.2923

Provision for diminution

in value of investment1479062 4.76 0 0


directly28298 5844 1537 0.091 0.023 0.0073

3,543,357 2,376,711 699,227 11.413 9.218 3.2996


income after provisions7,172,032 6,786,197 5,259,357 23.101 26.32 24.818


income

Fee, commission and

brokerage income 2,539,321 2,429,599 1,804,998 8.1791 9.423 8.5176

Dividend income 300,943 64,722 37,393 0.9693 0.251 0.1765


foreign currencies 914,845 474,510 386,997 2.9467 1.84 1.8262

Gain on sale of securities 424,220 2053192 180751 1.3664 7.963 0.8529

Unrealized loss on

revaluation of investments

classifies as held for

trading

181,571 21530 27599 0.5848 0.084 0.1302

Other income 1,247,669 1,031,372 842,099 4.0187 4 3.9738

Total non-mark-up /

interest income 5,245,427 6,038,466 3,224,639 16.895 23.42 15.217

12,417,459 12,824,663 8,483,996 1357.3 2703 2192.3


expense

Administrative expenses 10,741,399 8,272,587 5,874,745 5915.8 38424 21286


balance sheet obligations28,582 6,959 0 2.2908 0.042 0

Other charges 122,758 9,565 43,306 2.3403 0.058 1.343

Total non mark-up /

interest expenses10,622,739 8289111 5,918,051 85.547 49.87 69.755

Profit before taxation 1,794,720 4,535,552 2,565,945 5.7807 27.29 12.108

Taxation 0 0 0

- Current 1730051 1726810 476226 5.5724 6.697

- Prior years 221797 0 100874 0.7144 0 0.476

- Deferred 1014835 321487 427902 3.2687 1.247 2.0192

493419 1405323 803254 1.5893 5.45 3.7905

Profit after taxation 1301301 3130229 1962691 4.1914 12.14 9.2617

Attributable to:


brought forward4851840 2823072 1886845

Transferred from surplus

on revaluation of fixed

assets - net of tax

24586 24585 26074 0.0792 0.095 0.123


appropriation6177727 5977886 3675610 19.898 23.18 17.345

Review of Descriptive Information

STANDARD CHARTERTED

The said company financial statements have prepared in

agreement with permitted accounting standards as pertinent in

Pakistan. Accepted accounting standards encompass of such

International Financial Reporting Standards issued by the

International Accounting Standards Board as are notified

under the Companies Ordinance, 1984, provisions of and

commands issued under the Companies Ordinance, 1984 and

Banking Companies Ordinance, 1962 and the commands

issued by State Bank of Pakistan (SBP). In case the

necessities of provisions and orders issued under the

Companies Ordinance, 1984 and Banking Companies

Ordinance, 1962 and the directives issued by SBP differ, the

provisions of and directives issued under the Companies

Ordinance, 1984 and Banking Companies Ordinance, 1962

and the directives issued by SBP shall prevail.

Amended IAS 27 Consolidated and Separate Financial

Statements (effective for annual periods beginning on or after

1 July 2009) requires accounting for changes in ownership

curiosity by the group in a auxiliary while maintaining

control, to be recognized as an equity transaction. When the

group loses control of subsidiary, any interest retained in the

former subsidiary will be measured at fair value with the gain

or loss recognized in the profit or loss. The application of the

standard is not likely to have an effect on the Group's

financial statements. The auditors conducted their audit in

agreement with the auditing standards as applicable in

Pakistan. These standards require that they plan and perform

the audit to obtain reasonable assurance about whether the

above said statements are free of any material misstatement.

And in their opinion the consolidated financial statements

present fairly the financial position of STANDARD

CHARTERTED as at December 31, 2007, 2008 & 2009

ASKARI BANK

Financial statements arranged by the management, present

moderately its condition of dealings, the results of its

operating cash flow and changes in equity. All directors of the

company are registered as tax payers and none of them has

default in payments of any loan to a banking company. The

auditors perform their audit in accordance with the auditing

standards as applicable in Pakistan. These standards require

that they plan and perform the audit to obtain reasonable

assurance about whether the above said statements are free of

any material misstatement. And in their opinion the

consolidated financial statements present fairly the financial

position of STANDARD CHARTERTED Limited as at

December 31, 2007, 2008 & 2009 and the results of its

operations, its cash flows and changes in equity for the year

then ended in accordance with the standard accounting

standards as applicable in Pakistan.

4. Comparisons

Financial trend analysis is an applied, practical approach for

monitoring the financial condition of any company through

the use of financial indicators. I shall use technique to

compare previous three-year period data and observes how

they change. This would permit an assessment of the current

financial condition.

a) Trend Analysis

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

future ratios to determine whether the company's financial

condition is improving or deteriorating over time. Trend

analysis studies the financial history of a firm for comparison.

By looking at the trend of a particular ratio, one sees whether

the ratio is falling, rising, or remaining relatively constant.

This helps to detect problems or observe good management.

TREND ANALYSIS

ASKARI BANKLIMITED

FOR THE YEARS 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend

a) Liquidity Ratios

Current Ratio1.20 1.19 1.16

Lower liquidity in

2009

Sales to Working Capital 0.5 times 0.5 times 0.6 times Increase in 2009

Working Capital95155274 104938111 100006655

Lower liquidity in

2009

b) Leverage Ratios

Time Interest Earned 2.43 1.79 1.83 Lower since 2009

Debt Ratio0.91 0.91 0.9

Leverage remain

same

Debt to Equity Ratio11.88 11.42 9.58

Drops in leverage in

2009

Current Worth / Net worth

Ratio1.78 1.66 1.33

Higher in 2007

Total Capitalization Ratio 0.56 0.53 0.42 Lower during 2009

Long term Assets versus Long

term Debt0.26 0.33 0.51

Drops in leverage in

2007

Debt Coverage Ratio0.02 0.008 0.0083

Lower coverage in

2007

c) Profitability Ratios

Net Profit Margin29.07% 19.97% 24.66%

Lower profitability

during 2008

Operating Income Margin57.9% 48% 59.6%

Increased Profitability

since 2009

Return on Assets2.27% 1.57% 2.15%

Lower ROA during

2008

Operating Assets Turnover192.7% 192.7% 174.70%

Lower efficiency

since 2009

Return on Operating Assets13.48% 10.37% 11.19%

Lower efficiency in

2008

Sales to Fixed Assets3.65 times 3.66 times 3.66 times

No change in last 3

years

d) Activity Ratios:

Total Asset Turnover0.07 0.07 0.08

Higher efficiency

since 2009

e) Market Ratios:

Dividend per Share – DPS1.0019 2.0014 3.597

Good market

perceptions

Earning Per Share- EPS 18.41 14.61 20.57 Higher In 2009

Price / Earning Ratio 0.54 0.68 0.49 Lower in 2009

Dividend Payout Ratio0.0544 0.137 0.175

Good market

perceptions

Dividend Yield 0.10019 0.20014 0.3597 Lower in 2007

Book Value per Share6.5 7.98 9.39

Good market

perceptions

f) Statement of cash flow

Operating Cash Flow to Total

Debt0.033 0.089 0.027

Lower in 2007

Operating Cash Flow per

Share25.87 81.48 24.02

Increased during

2008

TREND ANALYSIS

STANDARD CHARTARTED LIMITED

FOR THE YEARS 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend

a) Liquidity Ratios

Current Ratio1.06 1.10 1.06

Higher liquidity in

2008

Sales to Working Capital 1.38 0.85 1.57 Increase in 2008

Working Capital 15276529 30128884 19741302 Lower liquidity in

2007

b) Leverage Ratios

Time Interest Earned 1.16 1.27 1.08Lower since 2009

Debt Ratio0.95 0.95 0.95

Leverage remain

same

Debt to Equity Ratio 24.91 22.71 22.72 Drops in leverage in

2009

Current Worth / Net worth

Ratio

1.2471.85 1.15 Higher during 2008

Total Capitalization Ratio 0.561487909 0.652339509 0.5299458 Increased during

2008

Long term Assets versus

Long term Debt

1.01 0.46 0.63 Higher during

leverage in 2007

Debt Coverage Ratio 0.055321869 0.048350633 0.0508531 Lower coverage in

2008

c) Profitability Ratios

Net Profit Margin 0.08%0.12% 0.04%

Lower profitability

during 2007

Operating Income Margin0.687738604 0.586337443 0.5437148

Increased

Profitability since

2007

Return on Assets 0.012776185 0.010355041 0.0038393 Lower ROA during

2007

Operating Assets Turnover2.41% 2.31% 2.19%

Lower efficiency

since 2009

Return on Operating Assets0.034 0.052 0.019

Lower efficiency in

2009

Sales to Fixed Assets 2.017 times 2.16 times 2.25 times Lower in 2007

d) Activity Ratios:

Total Asset Turnover0.07 0.07 0.08

Higher efficiency

since 2009

e) Market Ratios:

Dividend per Share – DPS00 00

1.21 Dividend announced

just in 2008

Earning Per Share- EPS 3.525 4.815 1.627 Higher In 2008

Price / Earning Ratio 0.54 0.68 0.49 Lower in 2009

Dividend Payout Ratio00 00 0.74

Good market

perceptions

Dividend Yield00 00 0.121

No Dividend in 2007

& 2008

Book Value per Share2.11 2.11 1.82

Good market

perceptions

f) Statement of cash flow

Operating Cash Flow to Total

Debt0.029 0.126 0.007 Lower in 2009

Operating Cash Flow per

Share15.70 60.99 3.12

Increased during

2008

b) Industry Averages and Comparisons with Competitors

The entire ratio has been compared through above mentioned

comparisons and analysis. Which include horizontal analysis,

vertical analysis and trend analysis?


c) Summary

Financial Statement Analysis is a method used by interested

parties such as investors, creditors, and management to

evaluate the past, current, and projected conditions and

performance of the firm. This report mainly deals with the

insight information of the two mentioned companies. In the

current picture where financial volatility is endemic and

financial intuitions are becoming popular, when it comes to

investing, the sound analysis of financial statements is one of

the most important elements in the fundamental analysis

process. At the same time, the massive amount of numbers in

a company's financial statements can be bewildering and

intimidating to many investors. However, through financial

ratio analysis, I tried to work with these numbers in an

organized fashion and presented them in a summarizing form


easily understandable to both the management and interested

investors.

It is required by law that all private and public limited

companies must prepare the financial statements like, income

statement, balance sheet and cash flow statement of the

particular accounting period. The management and financial

analyst of the company analyze the financial statements for

making any further financial and administrative decisions for

the betterment of the company. Therefore, I select this topic,

so that I have done some solid financial analysis that will

certainly help the management of review their performance

and also assist the interested people like investors and

creditors. That as a financial analyst how can I make any

important financial decision by analyzing the financial

statements of the company. Because, it is the primary

responsibility of the financial managers or financial analyst to

manage the financial matters of the company by evaluating

the financial statements. I am also providing some important

suggestions and opinions about the financial matters of the

business.

SUMMARY OF FINANCIAL POSITION OF Both companies

After study through different ratios, now I am reached

on the both companies financial conditions with respect of my

finding. In my point of view and according to my observation

or finding

The short-term company financial strategy is quite

satisfactory.

Immediate solvency position of the company is also

quite suitable. The company can meet its pressing

obligations directly

Credit policies are effective.

Over all profitability position of the company is quite

satisfactory.

Stock turnover rate is satisfactory. Stock of the

company is moving fast in the market.

The company is paying punctually to the suppliers.

The return on capital employed is satisfactory.

The management should take care of inventory management

and speed up the movement of stock. Effective selling

technique or product modification may be adopted to face the

competitors and to improve the financial position of the

company by taking appropriate decisions.

Conclusion / Findings and recommendation

The focus of financial analysis is on type figures

enclosed in the financial statements and the considerable

relationship that exits. The consistency and significance fasten

to the ratios will basically on hinge upon the superiority of

data on which they are best. They are as good for as awful as

the data it self.

Financial ratios are a useful by product of financial

statement and give uniform measures of firm’s financial

position, profitability and friskiness. It is an major and

powerful mechanism in the hands of financial analyst. By

devious one or other ratio or group of ratios he can analyze

the performance of a firm from the different point of view.

CH.M.AZEEM, 05/18/11,


The ratio study can help in understanding the liquidity

and short-term solvency of the firm, predominantly for the

trade creditors and banks. Long-term solvency position as

considered by different debt ratios can help a debt investor or

financial institutions to appraise the degree of financial risk.

The prepared efficiency of the firm in utilizing its assets to

produce profits can be assessed on the basis of unusual

turnover ratios. The profitability of the firm can be analyzed

with the help of profitability ratios.

However the ratio analyses endure from different

limitations also. The ratios need not be taken for approved

and customary at face values. These ratios are regular and

there are wide spread variations in the same measure. Ratios

generally do the work of diagnosing a problem only and failed

to provide the solution to the problem.

According to my finding and observation after analysis both

companies financial situation my finding are under below

1. In my point of view Liquidity position of both

companies is not up to mark, as we see in industrial

level or other companies financial position, however

according to my finding Standard Chartered have

better position as we compare to Askari Bank. In my

point of view both companies should improve its

liquidity position to gain the financial strength.

2. on the other hand if we look Leverage rations of both

companies we could see that leverage rations shows

the high risk connected with the both companies.

normally the leverage ratios might be measure total

percentage of funds provided by the creditors , so we

could say that the proportion of a firm,s total assets is

being financed with the high percentage of barrowed

funds

3. Now we could see the Profitability ratios, here we

could see that Standard chartered bank perform better

than Askari Bank. Because the net profit of Askari

Bank have low profitability ratios due to h heavy

financial charges.

4. According to my finding we could see that Standard

Chattered has a good market perception due to

continuous statement of dividends but on the other

side Askari bank has not announced in dividend in

year 2008 and 2009

5. Now we could find the book value per share of both

companies. We could see that standard chartered is

higher than Askari bank. It shows that net worth of the

corporation. So it is similar to the earning per share,

on the other side it could also relates the stockholder

equity to the number of the shares outstanding, giving

the shares a new value, so that the net value of

Standard Chartered is much better then Askari bank

RecommendationIn the base of my finding and comparative financial statement

analysis of two companies, I recommend for Standard

Chartered and Akari Bank the best option for investment, the

reason behind several considerations. First both companies

look like not bad overall results in the financial statement

analysis. Because the majority of the company ratios provide

the best comparative performance in comparison to other

company in the market. Now it is time to say that one

significant ratio that underlines our recommendation is the

result of the return on equity ratio. Since this figure shows the

efficiency of investment investors in standard chartered and

Askari Bank

LIMITATIONS OF RATIO ANALYSIS

Ratio analysis has some limitation, some major are under below

We know that Ratios require quantitative information

for analysis but it is not crucial about logical output.

The statistics in a set of accounts are probable to be at

least several months out of date, and so might not give

a appropriate signal of the company’s current financial

position.

Where past cost gathering is used, asset valuations in

the balance sheet could be ambiguous. Ratios based on

this information will not be very useful for decision-

making.

When we want to compare recital over time, there is

need to reflect on the changes in price.

When comparing performance over time, there is need

to consider the changes in technology. The movement

in performance should be in line with the changes in

technology.

On the other hand when want to compare the company

current performance over the time; here we need to

consider the changes in technology too. So the

movement in performance will be in line with the

change in technology

Both companies might have different capital structure

and its performance when one is all equity financed

and another is geared company it may not be good

analysis

BIBLIOGRAPHY

REFERENCE BOOKS –

FINANCIAL MANAGEMENT

Theory, Concepts & problems

R.P.RUSTAGI


Text and problems

M.Y. KHAN AND P. K. JAIN

MANAGEMENT ACCOUNTING

AINAPURE


L.N. CHOPDE D.N. CHOUDHARI S.L. CHOPDE

Standard chartered documents

2007 to 2009

Askari bank Documents

2007 to 2009

FIN619 Final Project

Documents

Transcript of FIN619 Final Project