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V irtual University of Pakistan

Evaluation Sheet for Project


Spring 2010

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Proposal Pass
Writing
Report Pass
writing
Name of Student: Irfan Khan Written Pass
Work
Status
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n & Viva
voce
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Result
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


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

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

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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.........................................................................................................7
Introduction ...................................................................................................................10
Background of the project:............................................................................................11
BANKING AND FINANCIAL SECTOR IN PAKISTAN..........................................12
The Banking Sector ......................................................................................................12
ESTABLISHING DIFFERENT INSTITUTIONS........................................................13
COMMMERCIAL BANK IN PAKISTAN..................................................................15
CURRENT SITUATION IN PAKISTAN....................................................................17
Company’s introduction................................................................................................18
introduction to standard chartered.................................................................................18
introduction to askari bank............................................................................................19
Objectives .....................................................................................................................20
Significance...................................................................................................................20
Processing and Analysis................................................................................................21
Data Collection .............................................................................................................21
Data collection instrument.............................................................................................22
Data Analysis.............................................................................................................22
Project Proceedings...................................................................................................22
Financial Statement analysis..........................................................................................23
BASED ON FUNCTION:.............................................................................................24
Ratio Analysis of both companies and interruption .....................................................26
Profitability Ratios:........................................................................................................41
Operating Assets of STANDARD CHARTERTED Limited........................................47
Market Ratio: ...................................................................................................................51
Dividend per Share – DPS:................................................................................................51
Dividend Yield:.............................................................................................................55
Vertical and Horizontal.................................................................................................59
Horizontal Analysis.......................................................................................................60
Vertical Analysis..........................................................................................................68
Review of Descriptive Information...............................................................................79
Dividend per Share – DPS.................................................................................................83
Dividend per Share – DPS.................................................................................................85
SUMMARY OF FINANCIAL POSITION OF Both companies .................................88
Conclusion / Findings and recommendation.................................................................89
Recommendation...........................................................................................................91
LIMITATIONS OF RATIO ANALYSIS.....................................................................92
BIBLIOGRAPHY..........................................................................................................94
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 flows
Market 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 Overdraft
o Discounting Bills of exchange
o Loans
o 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

www.vuaccess.blogspot.com

 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 Instruction
o Background of the Project
o Introduction to Organization business sector
o Introduction to Both companies
o Objectives and significance of the Project
o Data Process and Analysis
o Data collection sources
o Data collection Instruments
o Sampling
o Conclusion, recommendations and Limitation of the study
o Bibliography and Appendix

Financial Statement analysis

Liquidity Analysis Ratios

1. Current Ratio
2. Quick Ratio
3. Net working Capital Ratio
4. Sales to working Capital

PROFITABILITY ANALYSIS RATIOS

1. Return on Assets (ROA)


2. Return on Equity (ROE)
3. Return on Common Equity (ROCE)
4. Profit Margin
5. Earnings per share (EPS)

ACTIVITY ANALYSIS RATIOS


1. Assets Turnover Ratio
2. Accounts Receivable Turnover Ratio
3. Inventory Turnover Ratio

CAPITAL STRUCTURE ANALYSIS

1. Debt to Equity Ratio


2. Interest Coverage Ratio

CAPITAL MARKET ANALYSIS RATIO

1. Price Earnings (PE) Ratio


2. Market to Book Ratio
3. Dividend Yield
4. 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 31ST DECEMBER
(Rupees in Thousands)

Particular 2007 2008 2009


ASSETS:
Cash and balances with treasury 26295860 22741035 21521550
banks
Balances with other banks 1628280 1261582 2238182
Lending to financial institutions 15225935 31466898 20568064
Investments 40696466 29586663 83784536
Advances 119537015 125601465 124446586
Operating fixed assets 3734139 6995784 3886275
Deferred tax assets 3201017 3298730 4159452
Other assets 16992650 19239470 22133748
Total Assets 227311362 240191627 282738393
LIABILITIES:
Bills payable 6637388 4296420 4296420
Borrowings 6616065 8695730 8695730
Deposits and other accounts 177161630 174551801 174551801
Sub-ordinated loans 1912455 32605787 1710300
Other liabilities 3,219,796 32605787 32605787
Total Liabilities 195547334 252755525 221860038
Net 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- (274265) (1252980) 3080285


net of Tax
Total 43066310 42757140 47745858

ASKARI BANK

AS AT 31ST DECEMBER
(Rupees in Thousands)

Particular 2007 2008 2009


ASSETS:
Cash and balances with treasury 13,356,055 16,029,635 19,385,843
banks
Balances with other banks 3,497,054 3,954,814 8,364,261
Lending 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 19,300,163
Deposits 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 12,987 333,925
Other 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- 166,342 936,468 1,806,384
net of Tax
Total 12,265,987 12,971,363 14,949,072

PROFIT AND LOSS ACCOUNT


S AT 31ST DECEMBER
(Rupees in Thousands)
Particular 2007 2008 2009
Mark-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 3,920,240 3,824,778 2,324,377
advances
Provision / (Reversal) for impairment in the 1,501 508 76,784
value of investments
Bad debts written off directly - 247,311 –
3,921,741 4,072,597 2,914,893
Net mark-up/interest income after 2,535,876 3,669,997 6,117,765
provisions
NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income 1,072,868 1,257,584 1,307,699
Dividend income 137,079 173,621 162,537
Income from dealing in foreign currencies 655,761 873,512 538,445
Gain on Sale of Securities –net 2,361,251 36,743 143,717
Unrealized gain on revolution of investment 1,728 22,384 (1,918)
classified as held for trading
Other income 336,809 343,156 404,221
Total non mark-up/interest income 4,565,496 2,707,000 2,554,701
Gross Income 7,101,372 6,376,997 8,672,466
NON MARK-UP/ INTEREST
EXPENSES
Administrative expenses 4,789,536 5,904,169 6,995,857
Other provisions/write offs - 459 –
Other charges 12,051 10,987 34,368
Total 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 1,642,241
Taxation
-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 2,144,810 308,980


Profit available for appropriation 4,480,991 2,531,035 1,416,773
Basic/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
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

ASKARI BANK

Particular 2007 2008 2009


Current Assets 123,168,30 157,767,171 172,820,914
9

Current liabilities 152,352,37 178,029,627 220,078,211


3

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
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

Year 2007 2008 2009


Current assets 255,545,214 264,617,178 312,874,212
Current liabilities 95155274 104938111 100006655
Sales to Working 0.5 times 0.5 times 0.6 times
Capital

ASKARI BANK

Year 2007 2008 2009


Sales 21191470 25783871 31046583

Working Capital 15276529 30128884 19741302


Sales to Working 1.38 0.85 1.57

Interpretation and Comments

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:
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

Year 2007 2008 2009


Current Assets 575611106 671597594 731954693
Current Liabilities 480455832 566659483 631948038
Working Capital 95155274 104938111 100006655

ASKARI BANK

Year 2007 2008 2009


Current Assets 265182551 316972828 335217471
Current Liabilities 249906022 286843944 315476169
Working Capital 15276529 30128884 19741302

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.
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

Year 2007 2008 2009


EBIT 32044524 34298574 48559935
Interest Charges 13204037 19153957 19153957
TIE ratio 2.43 1.79 1.83

ASKARI BANK
Year 2007 2008 2009
EBIT 17798831 21156515 22125914
Interest charges 15232886 16620963 20331194
TIE ratio 1.16 1.27 1.08

Interpretation and Comments

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

Year 2007 2008 2009


Total debt 536848102 628754092 682747953
Total Assets 590291468 691991521 757928,89
Debt Ratio 0.91 0.91 0.9

ASKARI BANK

Year 2007 2008 2009


Total debt 263443596 312675308 331946025
Total Assets 275685541 328895152 348990764
Debt Ratio 0.95 0.95 0.95

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

STANDARD CHARTERTED

Year 2007 2008 2009


Total debt 536848102 628754092 682747953

Total Equity 45177664 55063125 71280902


Debt To Equity Ratio 11.88 11.42 9.58

ASKARI BANK
Year 2007 2008 2009
Total debt 263443596 312675308 331946025
Total Equity 10572605 13766673 14608523
Debt To Equity Ratio 25.91 24.71 23.72

Interpretation and Comments


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:

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

Year 2007 2008 2009


Current Worth 95155274 104938111 100006655
Net Worth 53443366 63237429 75180436
Current Worth to Net 1.88 1.66 1.33
worth Ratio

ASKARI BANK

Year 2007 2008 2009


Current Worth 15276529 30128884 19741302
Net Worth 12241945 16219844 17044739
Current Worth to Net 1.247 1.85 1.15
worth Ratio

Interpretation and Comments


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
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

Year 2007 2008 2009


Long Term debt 56392270 62094609 50799915
Long term debt + Equity 101569934 117157734 122080817
Capitalization Ratio 0.56 0.53 0.42
worth Ratio

ASKARI BANK
Year .2007 2008 2008
Long Term debt 13537574 25831364 16469856
Long term debt + Equity 24110179 39598037 31078379
Capitalization Ratio 0.56 0.65 0.52
worth Ratio

Interpretation and Comments


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

Year 2007 2008 2009


Long Term Assets 14680362 20393927 25973696
Long term debt 56392270 62094609 50799915
L.T Assets /L.T Debts 0.26 0.33 0.51
Debt:worth Ratio

ASKARI BANK

Year 2007 2008 2009


Long Term Assets 13773293 11922324 10502990
Long term debt 13537574 25831364 16469856
L.T Assets /L.T Debts 1.01 0.46 0.63
worth Ratio

Debt Coverage Ratio:


Debt Coverage Ratio = Net Operating Income / Total Debt
STANDARD CHARTERTED
Year 2007 2008 2009
Net Operating Income 12074762 5121453 5655568
Total Debt 536848102 628754092 682747953
Debt Coverage Ratio 0.02 0.008 0.0083
Debt:worth Ratio

ASKARI BANK

Year 2007 2008 2009


Net Operating Income 14574192 15118049 16880487
Total Debt 263443596 312675308 331946025
Debt Coverage Ratio 0.05532186 0.048350633 0.0508531
worth Ratio 9

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 2008


Net Profit 12700315 10084037 15614020
Sales 43685740 50481021 63305033
Net Profit Margin 29.07% 19.97% 24.66%

ASKARI BANK

Year 2007 2008 2008


Net Profit 1762691 3130229 1301301
Sales 21191470 25783871 31046583
Net Profit Margin 8.31% 12.1% 4%

Interpretation and Comments


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

STANDARD CHARTERTED

Year 2007 2008 2009


Operating Income 25278799 24275410 37738818
Net Sales 43685740 50481021 63305033
Operating Income 57.9% 48% 59.6%
Margin

ASKARI BANK

Year 2007 2008 2009


Operating Income 14574192 15118049 16880487
Net Sales 21191470 25783871 31046583
Operating Income 0.687738604 0.586337443 0.5437148
Margin

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

Year 2007 2008 2009


Net income 12700315 10084037 15614020
Total Average assets 559592686.5 641141494.5 724959955
ROA 2.27% 1.57% 2.15%

ASKARI BANK

Year 2007 2008 2009


Net income 1762691 3130229 1301301
Total Average assets 137966927.5 302290346.5 338942958
ROA 1.27% 1.01% 0.038%

Interpretation and Comments


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

Year 2007 2008 2009


Net income 12700315 10084037 15614020
Total Equity 45177664 55063125 71280902
ROE 28.11% 18.31% 21.9%

ASKARI BANK

Year 2007 2008 2009


Net income 1762691 3130229 1301301
Total Equity 10572605 13766673 14608523
ROE 16.6% 22.5% 8.9%

Interpretation and Comments


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

STANDARD CHARTERTED

Year 2007 2008 2009


Net Profit 12700315 10084037 15614020
Total assets 590291468 691991521 757928389
DuPont ROA 2.15% 1.46% 2.06%

ASKARI BANK

Year 2007 2008 2009


Net Profit 1762691 3130229 1301301
Total assets 275685541 328895152 348990764
DuPont ROA 0.006 0.009 0.003

Operating Assets Turnover:


Operating Assets Turnover = Operating
Assets x 100
Net Sales
STANDARD CHARTERTED

Year 2007 2008 2009


Operating Assets 94230402 97259620 110591707
Net Sales 43685740 50481021 63305033
Operating Assets Turnover 192.7% 192.7% 174.70%
Margin

ASKARI BANK

Year 2007 2008 2009


Operating Assets 51094302 59739440 68041671
Net Sales 21191470 25783871 31046583
Operating Assets Turnover 2.41% 2.31% 2.19%
Margin

Operating Assets of STANDARD


CHARTERTED Limited
2007
Operating Assets:
Cash and balances with treasury banks 56533134
Balances with other banks 39307321
Operating fixed assets 15751254
111591709

2008
Operating Assets:
Cash and balances with treasury banks 55487664
Balances with other banks 27020704
Operating fixed assets 14790555
98269620
2009
Operating Assets:
Cash and balances with treasury banks 56310378
Balances with other banks 35965048
Operating fixed assets 11954876
104230302

Operating Assets of ASKARI BANK Limited


2007
Operating Assets:
Cash and balances with treasury banks 27859360
Balances with other banks 12731952
Operating fixed assets 11522990
52114302

2008
Operating Assets:
Cash and balances with treasury banks 29436378
Balances with other banks 18380738
Operating fixed assets 11922324
59739440

2009
Operating Assets:
Cash and balances with treasury banks 32687335
Balances with other banks 21581043
Operating fixed assets 14883293

69151671

Return on Operating Assets:


Return on Operating Assets = Profit after Taxation x
100
Operatin
g assets
STANDARD CHARTERTED

Year 2007 2008 2009


Net Profit 12700315 10084037 15614020
Operating Assets 94230402 97259620 110591707
Return on Operating Assets 13.48% 10.37% 11.19%

ASKARI BANK

Year 2007 2008 2009

Net Profit 1762691 3130229 1301301

Operating Assets 51094302 59739440 68041671

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

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

ASKARI BANK
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

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 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

Year 2007 2008 2009


Total Sales 43685740 50481021 63305033
Total Assets 590291468 691991521 757928389
Total Asset Turnover 0.07 0.07 0.08

ASKARI BANK
Year 2007 2008 2009
Total Sales 21191470 25783871 31046583
Total Assets 275685541 328895152 348990764
Total Asset Turnover 0.07 0.07 0.08

Interpretation and Comments


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.
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

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
ASKARI BANK

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

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 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

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

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

Interpretation and Comments


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

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

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

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

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

Year 2007 2008 2009


DPS 00 00 1.21
Share Price 10 10 10
Dividend Yield 00 00 0.121

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

Year 2008 2008 2008


Equity 45177664 55063125 71280902
Share Capital 6900000 6900000 7590000
Book Value per Share 6.5 7.98 9.39

ASKARI BANK

Year 2008 2008 2008


Equity 10572605 13766673 14608523
Share Capital 5000000 6500000 7995000
Book Value per Share 2.11 2.11 1.82

f) Statement of cash flow:


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

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

ASKARI BANK

Year 2007 2008 2009


Operating Cash flow 7852362 39645325 2499606
Total Debts 263443596 312675308 331946025
Operating Cash Flow to T.Debt 0.029 0.126 0.007

Operating Cash Flow per Share:


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

STANDARD CHARTERTED
Year 2007 2008 2009
Operating Cash flow 17851517 56224065 18231677
Total Shares 690000 690000 759000
Operating Cash Flow per Share 25.87 81.48 24.02

ASKARI BANK

Year 2007 2008 2009


Operating Cash flow 7852362 39645325 2499606
Total Shares 500000 650000 799500
Operating Cash Flow per Share 15.70 60.99 3.12

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 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 Analysis
Methods 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
56533134 55487664 46310478 122.07 119.8
with treasury banks
Balances with
39307321 27020704 35965048 109.29 75.13
other banks
Lending to
financial 6193787 1628130 6550128 94.56 24.86
institutions
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
14751252 13780555 11954876 123.39 115.3
assets
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 46844890 58994609 56392270 83.07 104.6
institutions
Deposits and other
597090545 531298127 459140198 130.05 115.7
accounts
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
682747953 628754092 536848102 127.18 117.1
LIABILITIES
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
39447648 28341670 20 475,080 159.92 128
profit
Total equity
attributable to the
71280902 55063125 45177664 157.78 121.9
equity holders of
the Bank
Minority interest 890099 965642 913317 97.458 105.7
Surplus on
revaluation of 3009435 7208662 7352385 40.931 98.05
assets - net of tax
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 Analy
(Rupees in ‘000’) 2009 2008
Mark-up / return /
63,305,033 50,481,021 43,685,740 144.91 115.6
interest earned
Mark-up / return /
26,525,556 19,153,957 13,204,037 200.89 145.1
interest expensed
Net mark-up /
36,779,477 31,327,064 30,481,703 120.66 102.8
interest income
Provision against
non-performing
6,904,919 8,238,227 2,863,207 241.16 287.7
loans and
advances - net
Charge / (reversal)
against off-
372,598 (54,626) (45,438) -820.01 120.2
balance sheet
obligations
Charge / (reversal)
of provision
against diminution 1,909,887 (84,310) (13,697) -13944 615.5
in the value of
investments
Bad debts written
---------- ---------- -------------
off directly
9,187,404 8,099,291 2,804,072
Net mark-up /
interest income 27,592,073 23,227,773 27,677,631 99.691 83.92
after provisions
Fee, commission
and brokerage 4,518,408 3,420,051 3,931,710 114.92 86.99
income
Income / gain on
2,369,233 2,472,663 1,219,623 194.26 202.7
investments
Income from
dealing in foreign 2,374,318 1,487,374 1,102,358 215.39 134.9
currencies
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
16,378,811 10,023,164 8,489,496 192.93 118.1
/ interest income
43,970,884 33,250,937 36,167,127 121.58 91.94
Non mark-up /
interest expense
Administrative
21,348,016 18,297,279 15,425,461 138.39 118.6
expenses
Other provisions /
200,163 276,111 122,510 163.39 225.4
write offs - net
Other charges 64,751 85,152 54,898 117.95 155.1
Workers welfare
323,575
fund
Total non mark-up
21,936,505 18,106,32 15,602,869 140.59 0
/ interest expenses
Profit before
22,034,379 15,144,617 18,840,487 116.95 80.38
taxation
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
15,614,020 10,084,037 12,700,315 122.94 79.4
taxation
Attributable to:
Equity holders of
15,535,011 10,000,231 12,630,259 123 79.18
the Bank
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
Horizontal Analysis
(Rupees in ‘000’)
2007 2008 2009
ASSETS 2007 2008 2009
Cash and balances
with treasury 118.41 29436378 27859360 118.41 105.7 100
banks
Balances with
169.5 18380738 12731952 169.5 144.4 100
other banks
Lending to
financial 26.616 3452059 12456653 26.616 27.71 100
institutions
Investments 134.46 88491564 56502210 134.46 156.6 100
Advances 132.88 171198992 144999325 132.88 118.1 100
Operating fixed
131.14 11922324 10502990 131.14 113.5 100
assets
Deferred tax asset 0 0 0 0
Other assets 159.58 6013097 5633051 159.58 106.7 100
TOTAL
126.59 328895152 275685541 126.59 119.3 100
ASSETS
LIABILITIES 0
Bills payable 111.68 4138243 3091135 111.68 133.9 100
Borrowings
from financial 163.09 21230697 8394130 163.09 252.9 100
institutions
Deposits and
125.56 273173841 239509391 125.56 114.1 100
other accounts
Sub-ordinate
79.798 3220858 3222106 79.798 99.96 100
loans
Liabilities
against assets
0 0 0 0
subject to
finance lease
Deferred tax
10.85 1379809 1921338 10.85 71.82 100
liability
Other liabilities 154.56 9531860 7305496 154.56 130.5 100

TOTAL
126 312675308 263443596 126 118.7 100
LIABILITIES
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
122.12 4851840 2823072 122.12 171.9 100
profit
138.17 13766673 10572605 138.17 130.2 100
Surplus on
revaluation of 145.94 2453171 1669340 145.94 147 100
assets - net of tax
TOTAL
139.23 16219844 12241945 139.23 132.5 100
EQUITY
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 /
31046583 25783871 21191470 146.51 121.7 100
interest earned
Mark-up / return /
20331194 16620963 15232886 133.47 109.1 100
interest expensed
Net mark-up / interest
10715389 9162908 5958584 179.83 153.8 100
income
Provision against non-
performing loans and 2035997 2370867 697690 291.82 339.8 100
advances - net
Provision for
diminution in value of 1479062 0 0 0
investment
Bad debts written off
28298 5844 1537 1841.1 380.2 100
directly
3,543,357 2,376,711 699,227 506.75 339.9 100
Net mark-up / interest
income after 7,172,032 6,786,197 5,259,357 136.37 129 100
provisions
Non mark-up /
interest income
Fee, commission and
2,539,321 2,429,599 1,804,998 140.68 134.6 100
brokerage income
Dividend income 300,943 64,722 37,393 804.81 173.1 100
Income from dealing in
914,845 474,510 386,997 236.4 122.6 100
foreign currencies
Gain on sale of
424,220 2053192 180751 234.7 1136 100
securities
Unrealized loss on
revaluation of
181,571 21530 27599 657.89 78.01 100
investments classifies
as held for trading
Other income 1,247,669 1,031,372 842,099 148.16 122.5 100
Total non-mark-up /
5,245,427 6,038,466 3,224,639 162.67 187.3 100
interest income
12,417,459 12,824,663 8,483,996 146.36 151.2 100
Non mark-up /
interest expense
Administrative
10,741,399 8,272,587 5,874,745 182.84 140.8 100
expenses
Provisions against off-
balance sheet 28,582 6,959 0 0 0 0
obligations
Other charges 122,758 9,565 43,306 283.47 22.09 100
Total non mark-up /
10,622,739 8289111 5,918,051 179.5 0 100
interest expenses
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
4851840 2823072 1886845
brought forward
Transferred from
surplus on revaluation
24586 24585 26074 94.293 94.29 100
of fixed assets - net of
tax
Profit available for
6177727 5977886 3675610 168.07 162.6 100
appropriation
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 56533134 55487664 46310478 7.4589 8.019 7.8454
treasury banks
Balances with
39307321 27020704 35965048 5.1862 3.905 6.0928
other banks
Lending to
financial 6193787 1628130 6550128 0.8172 0.235 1.1096
institutions
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
14751252 13780555 11954876 1.9463 1.991 2.0252
fixed assets
Deferred tax
11222444 6613372 2725486 1.4807 0.956 0.4617
asset
TOTAL
757928389 691991521 590291468 100 100 100
ASSETS
LIABILITIES
Bills payable 9944257 15418230 5737457 1.312 2.228 0.972
Borrowings
from financial 46844890 58994609 56392270 6.1806 8.525 9.5533
institutions
Deposits and 45914019
597090545 531298127 78.779 76.78 77.782
other accounts 8
Sub-ordinate
3954925 3100000 0 0.5218 0.448
loans
Liabilities
against assets
subject to
finance lease
Other liabilities 24913236 19943126 15578177 3.287 2.882 2.6391
Deferred tax
------- ----------- ---------
liability
TOTAL 53684810
682747953 628754092 90.081 90.86 90.946
LIABILITIES 2
NET ASSETS 75180436 63237429 53443366 9.919 9.14 9.054
REPRESENTED BY

Shareholders Equity
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 / 63,305,033 50,481,021 43,685,740 100 100 100
interest earned
Mark-up / return / 26,525,556 19,153,957 13,204,037 41.901 37.94 30.225
interest expensed
Net mark-up / 36,779,477 31,327,064 30,481,703 58.099 62.06 69.775
interest income
Provision against 6,904,919 8,238,227 2,863,207 10.907 16.32 6.5541
non-performing
loans and
advances - net
Charge / (reversal) 372,598 (54,626) (45,438) 0.5886 -0.108 -0.104
against off-
balance sheet
obligations
Charge / (reversal) 1,909,887 (84,310) (13,697) 3.017 -0.167 -0.031
of provision
against diminution
in the value of
investments
Bad debts written ---------- ---------- ------------- 0 0 0
off directly
9,187,404 8,099,291 2,804,072 14.513 16.04 6.4187
Net mark-up / 27,592,073 23,227,773 27,677,631 43.586 46.01 63.356
interest income
after provisions
Fee, commission 4,518,408 3,420,051 3,931,710 7.1375 6.775 9
and brokerage
income
Income / gain on 2,369,233 2,472,663 1,219,623 3.7426 4.898 2.7918
investments
Income from 2,374,318 1,487,374 1,102,358 3.7506 2.946 2.5234
dealing in foreign
currencies
Gain on 4,000,330 ------- 0 6.3191 0.3162 0
investments in
associate
Other income 3,116,522 2,643,076 2,235,805 4.923 5.236 5.1179
Total non-mark- 16,378,811 10,023,164 8,489,496 25.873 19.86 19.433
up / interest
income
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 / 200,163 276,111 122,510 0.3162 0.547 0.2804
write offs - net
Other charges 64,751 85,152 54,898 0.1023 0.169 0.1257
Workers welfare 323,575 0.5111 0 0
fund
Total non mark-up 21,936,505 18,106,32 15,602,869 34.652 0 35.716
/ interest expenses
Profit before 22,034,379 15,144,617 18,840,487 34.807 30 43.127
taxation
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 15,614,020 10,084,037 12,700,315 24.665 19.98 29.072
taxation
Attributable to:
Equity holders of 15,535,011 10,000,231 12,630,259 24.54 19.81 28.912
the Bank
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 20.47 13.18 18.30 3.23 2.61 4.189
earnings per share

VERTICAL ANALYSIS
ASKARI BANK LIMITED
BALANCE SHEET
AS ON DEC 31 2008, 2008 & 2008
Years Vertical Analysis
(Rupees in ‘000’)
2009 2008 2007
ASSETS 2009 2008 2007
Cash and 32987335 29436378 27859360 9.4522 8.95 10.105
balances with
treasury banks
Balances with 21581043 18380738 12731952 6.1838 5.589 4.6183
other banks
Lending to 3315500 3452059 12456653 0.95 1.05 4.5184
financial
institutions
Investments 75973238 88491564 56502210 21.769 26.91 20.495
Advances 192671169 171198992 144999325 55.208 52.05 52.596
Operating 13773293 11922324 10502990 3.9466 3.625 3.8098
fixed assets
Other assets 8989186 6013097 5633051 2.5758 1.828 2.0433
TOTAL 348990764 328895152 275685541 100 100 100
ASSETS
LIABILITIES
Bills payable 3452031 4138243 3091135 0.9891 1.258 1.1213
Borrowings 13690222 21230697 8394130 3.9228 6.455 3.0448
from financial
institutions
Deposits and 300732858 273173841 239509391 86.172 83.06 86.878
other accounts
Sub-ordinate 2571169 3220858 3222106 0.7367 0.979 1.1688
loans
Liabilities
against assets
subject to
finance lease
Deferred tax 208465 1379809 1921338 0.0597 0.42 0.6969
liability
Other liabilities 11291280 9531860 7305496 3.2354 2.898 2.6499
TOTAL 331946025 312675308 263443596 95.116 95.07 95.559
LIABILITIES

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 3447467 4851840 2823072 0.988 1.48 1.024
profit
14608523 13766673 10572605 4.186 4.19 3.835
Surplus on 2436216 2453171 1669340 0.698 0.75 0.606
revaluation of
assets - net of tax
TOTAL 17044739 16219844 12241945 4.884 4.93 4.441
EQUITY
2007 2008 2009 Vertical Analysis
(Rupees in ‘000’) 2007 2008 2009
Mark-up / return / interest 31046583 25783871 21191470 100 100 100
earned
Mark-up / return / interest 20331194 16620963 15232886 65.486 64.46 71.882
expensed
Net mark-up / interest 10715389 9162908 5958584 34.514 35.54 41.23
income
Provision against non- 2035997 2370867 697690 6.55 9.195 3.2923
performing loans and
advances - net
Provision for diminution 1479062 4.76 0 0
in value of investment
Bad debts written off 28298 5844 1537 0.091 0.023 0.0073
directly
3,543,357 2,376,711 699,227 11.413 9.218 3.2996
Net mark-up / interest 7,172,032 6,786,197 5,259,357 23.101 26.32 24.818
income after provisions
Non mark-up / interest
income
Fee, commission and 2,539,321 2,429,599 1,804,998 8.1791 9.423 8.5176
brokerage income
Dividend income 300,943 64,722 37,393 0.9693 0.251 0.1765
Income from dealing in 914,845 474,510 386,997 2.9467 1.84 1.8262
foreign currencies
Gain on sale of securities 424,220 2053192 180751 1.3664 7.963 0.8529
Unrealized loss on 181,571 21530 27599 0.5848 0.084 0.1302
revaluation of investments
classifies as held for
trading
Other income 1,247,669 1,031,372 842,099 4.0187 4 3.9738
Total non-mark-up / 5,245,427 6,038,466 3,224,639 16.895 23.42 15.217
interest income
12,417,459 12,824,663 8,483,996 1357.3 2703 2192.3
Non mark-up / interest
expense
Administrative expenses 10,741,399 8,272,587 5,874,745 5915.8 38424 21286
Provisions against off- 28,582 6,959 0 2.2908 0.042 0
balance sheet obligations
Other charges 122,758 9,565 43,306 2.3403 0.058 1.343
Total non mark-up / 10,622,739 8289111 5,918,051 85.547 49.87 69.755
interest expenses
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
VERTICAL ANALYSIS
ASKARI BANK LIMITED
PROFIT & LOSS ACCOUNT

AS ON DEC 31 2009, 2008 & 2007

2009 2008 2007 Vertical Analysis


(Rupees in ‘000’) 2009 2008 2007
Mark-up / return / interest
31046583 25783871 21191470 100 100 100
earned
Mark-up / return / interest
20331194 16620963 15232886 65.486 64.46 71.882
expensed
Net mark-up / interest
10715389 9162908 5958584 34.514 35.54 41.23
income
Provision against non-
performing loans and 2035997 2370867 697690 6.55 9.195 3.2923
advances - net
Provision for diminution
1479062 4.76 0 0
in value of investment
Bad debts written off
28298 5844 1537 0.091 0.023 0.0073
directly
3,543,357 2,376,711 699,227 11.413 9.218 3.2996
Net mark-up / interest
7,172,032 6,786,197 5,259,357 23.101 26.32 24.818
income after provisions
Non mark-up / interest
income
Fee, commission and
2,539,321 2,429,599 1,804,998 8.1791 9.423 8.5176
brokerage income
Dividend income 300,943 64,722 37,393 0.9693 0.251 0.1765
Income from dealing in
914,845 474,510 386,997 2.9467 1.84 1.8262
foreign currencies
Gain on sale of securities 424,220 2053192 180751 1.3664 7.963 0.8529
Unrealized loss on
revaluation of investments
181,571 21530 27599 0.5848 0.084 0.1302
classifies as held for
trading
Other income 1,247,669 1,031,372 842,099 4.0187 4 3.9738
Total non-mark-up /
5,245,427 6,038,466 3,224,639 16.895 23.42 15.217
interest income
12,417,459 12,824,663 8,483,996 1357.3 2703 2192.3
Non mark-up / interest
expense
Administrative expenses 10,741,399 8,272,587 5,874,745 5915.8 38424 21286
Provisions against off-
28,582 6,959 0 2.2908 0.042 0
balance sheet obligations
Other charges 122,758 9,565 43,306 2.3403 0.058 1.343
Total non mark-up /
10,622,739 8289111 5,918,051 85.547 49.87 69.755
interest expenses
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:
Unappropriated profit
4851840 2823072 1886845
brought forward
Transferred from surplus
on revaluation of fixed 24586 24585 26074 0.0792 0.095 0.123
assets - net of tax
Profit available for
6177727 5977886 3675610 19.898 23.18 17.345
appropriation
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 BANK
LIMITED
FOR THE YEARS 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend


a) Liquidity Ratios

Current Ratio Lower liquidity in


1.20 1.19 1.16
2009
Sales to Working Capital Increase in 2009
0.5 times 0.5 times 0.6 times
Working Capital Lower liquidity in
95155274 104938111 100006655
2009
b) Leverage Ratios

Time Interest Earned Lower since 2009


2.43 1.79 1.83
Debt Ratio Leverage remain
0.91 0.91 0.9
same
Debt to Equity Ratio Drops in leverage in
11.88 11.42 9.58
2009
Current Worth / Net worth Higher in 2007
1.78 1.66 1.33
Ratio
Total Capitalization Ratio Lower during 2009
0.56 0.53 0.42
Long term Assets versus Long Drops in leverage in
0.26 0.33 0.51
term Debt 2007
Debt Coverage Ratio Lower coverage in
0.02 0.008 0.0083
2007
c) Profitability Ratios

Net Profit Margin Lower profitability


29.07% 19.97% 24.66%
during 2008
Operating Income Margin Increased Profitability
57.9% 48% 59.6%
since 2009
Return on Assets Lower ROA during
2.27% 1.57% 2.15%
2008
Operating Assets Turnover Lower efficiency
192.7% 192.7% 174.70%
since 2009
Return on Operating Assets Lower efficiency in
13.48% 10.37% 11.19%
2008
Sales to Fixed Assets No change in last 3
3.65 times 3.66 times 3.66 times
years
d) Activity Ratios:

Total Asset Turnover Higher efficiency


0.07 0.07 0.08
since 2009
e) Market Ratios:

Dividend per Share – DPS Good market


1.0019 2.0014 3.597
perceptions
Earning Per Share- EPS Higher In 2009
18.41 14.61 20.57
Price / Earning Ratio Lower in 2009
0.54 0.68 0.49

Dividend Payout Ratio Good market


0.0544 0.137 0.175
perceptions
Dividend Yield Lower in 2007
0.10019 0.20014 0.3597
Book Value per Share Good market
6.5 7.98 9.39
perceptions
f) Statement of cash flow

Operating Cash Flow to Total Lower in 2007


0.033 0.089 0.027
Debt
Operating Cash Flow per Increased during 2008
25.87 81.48 24.02
Share

TREND ANALYSIS
STANDARD CHARTARTED LIMITED
FOR THE YEARS 2007, 2008 & 2009

Performance Area 2007 2008 2009 Trend


a) Liquidity Ratios

Current Ratio Higher liquidity in


1.06 1.10 1.06
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 1.08


Lower since 2009

Debt Ratio Leverage remain


0.95 0.95 0.95
same
Debt to Equity Ratio 24.91 22.71 22.72 Drops in leverage in
2009
Current Worth / Net worth 1.247
1.85 1.15 Higher during 2008
Ratio
Total Capitalization Ratio 0.56148790 0.65233950
0.5299458 Increased during
9 9
2008

Long term Assets versus 1.01 0.46 0.63 Higher during


Long term Debt leverage in 2007
Debt Coverage Ratio 0.05532186 0.04835063
0.0508531 Lower coverage in
9 3
2008

c) Profitability Ratios

Net Profit Margin 0.08% Lower profitability


0.12% 0.04%
during 2007
Operating Income Margin 0.68773860 0.58633744 Increased
0.5437148
4 3 Profitability since
2007
Return on Assets 0.01277618 0.01035504
0.0038393 Lower ROA during
5 1
2007

Operating Assets Turnover Lower efficiency


2.41% 2.31% 2.19%
since 2009
Return on Operating Assets Lower efficiency in
0.034 0.052 0.019
2009
Sales to Fixed Assets
2.017 times 2.16 times 2.25 times Lower in 2007
d) Activity Ratios:

Total Asset Turnover Higher efficiency


0.07 0.07 0.08
since 2009
e) Market Ratios:

Dividend per Share – DPS 1.21 Dividend announced


00 00
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 Ratio Good market


00 00 0.74
perceptions
Dividend Yield No Dividend in 2007
00 00 0.121
& 2008
Book Value per Share Good market
2.11 2.11 1.82
perceptions
f) Statement of cash flow

Operating Cash Flow to Total


0.029 0.126 0.007 Lower in 2009
Debt
Operating Cash Flow per Increased during
15.70 60.99 3.12
Share 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?

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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.
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

Recommendation
In 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

 FINANCIAL MANAGEMENT
Text and problems

M.Y. KHAN AND P. K.


JAIN

 MANAGEMENT ACCOUNTING

AINAPURE

 FINANCIAL MANAGEMENT

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

Standard chartered documents

 2007 to 2009

Askari bank Documents


2007 to 2009

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