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Financial ratios - Assignment Example

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(31 December 2013). “Consolidated financial statements 31 December 2013.” Qatar Stock Exchange. Retrieved 14 May 2015 from…
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Financial ratios
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Financial Ratio Analysis Number: Lecturer: Financial Ratio Analysis Doha Bank Q.S.C. a) Liquidity Ratios i) Current asset ratio Current asset ratio = current assets/current liabilities
= 65,428,874,000/52,818,101,000
= 1.24 or 124%
ii) Acid test (quick) ratio
Acid test = (cash + Due from other banks + investment securities)/ current liabilities
= (3,435,761,000 + 9,180,420,000 + 11,703,577,000)/52,818,101,000
= 24,319,758,000/52,818,101,000
= 0.46 or 46%
iii) Cash ratio
Cash ratio = Cash Equivalents + Marketable Securities
Current Liabilities
= 24,319,758,000
52,818,101,000
= 0.46 or 46%
b) Financial leverage ratios
i) Debt ratio
Debt ratio= Total Debt/Total Assets
= 55,698,921,000/66,969,824,000
= 0.832 or 83.2%
ii) Debt-to-equity ratio
Debt-to-equity ratio= Total Debt/ Total Equity
= 55,698,921,000/11,270,903,000
= 4.942 or 494.2%
c) Efficiency ratios
i) Cash turnover
Cash turnover = Sales
Cash
= 2,394,462,000
3,435,761,000
= 0.7 or 70%
ii) Total asset turnover
Total asset turnover = Sales
Total assets
= 2,394,462,000
66,969,824,000
= 0.036 or 3.6%
iii) Fixed asset turnover
Fixed asset turnover = Sales
Net Plant & Equipment
= 2,394,462,000
759,471,000
= 3.153 or 315.3%

iv) Receivables turnover
Receivables turnover = Sales
Accounts receivables
= 2,394,462,000
9,180,420,000
= 0.261 or 26.1%

d) Profitability ratios
i) Net profit margin
Net profit margin = Net Income
Sales
= 1,312,652,000
2,394,462,000
= 0.55 or 55%
ii) Return on assets
Return on assets = Net Income
Assets
= 1,312,652,000
66,969,824,000
= 0.0196 or 1.96%
iii) Operating income margin
Operating income margin = Operating Income (EBIT)
Sales
= 1,317,759,000
2,394,462,000
= 0.55 or 55%
iv) Return on investment
Return on investment = Net Income
Long-term Liabilities + Equity
= 1,312,652,000
14,151,723,000
= 0.093 or 9.3%


v) Return on equity
Return on equity = Net Income
Equity
= 1,312,652,000
11,270,903,000
= 0.1165 or 11.65%
vi) Gross profit margin
Gross profit margin = Gross Profit
Sales
= 1,822,251,000
2,394,462,000
= 0.761 or 76.1%
e) Market value ratios
i) Price earnings ratio = Market price per share
Earnings per share
= 58.8
5.29
= 11.1 times

ii) Market-to-Book ratio
Market-to-Book ratio = market price per share
Book value per share
=58.8
43.7
= 1.35 times
Commercial Bank of Qatar (CBQ)
a) Liquidity Ratios
i) Current asset ratio
Current asset ratio = current assets/current liabilities
= 103,649,354,000/85,778,808,000
= 1.21 or 121%
ii) Acid test (quick) ratio
Acid test = cash + Due from other banks + investment securities/ current liabilities
= 36,786,810,000/85,778,808,000
= 0.43 or 43%
iii) Cash ratio
Cash ratio = Cash Equivalents + Marketable Securities
Current Liabilities
= 29,884,263,000
85,778,808,000
= 0.35 or 35%
b) Financial leverage ratios
i) Debt ratio
Debt ratio= Total Debt/Total Assets
= 96,556,770,000/113,111,865,000
= 0.854 or 85.4%
ii) Debt-to-equity ratio
Debt-to-equity ratio= Total Debt/ Total Equity
= 96,556,770,000/16,555,095,000
=5.83 or 583%
c) Efficiency ratios
i) Cash turnover
Cash turnover = Sales
Cash
= 3,607,146,000
6,902,547,000
= 0.52 times
ii) Total asset turnover
Total asset turnover = Sales
Total assets
= 3,607,146,000
113,111,865,000
= 0.032 times
iii) Fixed asset turnover
Fixed asset turnover = Sales
Net Plant & Equipment
= 3,607,146,000
1,283,186,000
= 2.81 times or 281%
iv) Receivables turnover
Receivables turnover = Sales
Accounts receivables
= 3,607,146,000
15,177,969,000
= 0.24 times
d) Profitability ratios
i) Net profit margin
Net profit margin = Net Income
Sales
= 1,605,378,000
3,607,146,000
= 0.445 or 44.5%

ii) Return on assets
Return on assets = Net Income
Assets
= 1,605,378,000
113,111,865,000
= 0.0142 or 1.42%

iii) Operating income margin
Operating income margin = Operating Income (EBIT)
Sales
= 1,607,758,000
3,607,146,000
= 0.446 or 44.6%

iv) Return on investment
Return on investment = Net Income
Long-term Liabilities + Equity
= 1,605,378,000
27,333,057,000
= 0.0587 or 5.87%
v) Return on equity
Return on equity = Net Income
Equity
= 1,605,378,000
16,555,095,000
= 0.097 or 9.7%
vi) Gross profit margin
Gross profit margin = Gross Profit
Sales
= 2,188,359,000
3,607,146,000
= 0.61 or 61%
e) Market value ratios
i) Price earnings ratio = Market price per share
Earnings per share
= 70.5
6.48
= 10.88 times
ii) Market-to-Book ratio
Market-to-Book ratio = market price per share
Book value per share
= 70.5
56.4
= 1.25 times
Comparisons between the two banks
Liquidity Ratios
Doha Bank
Commercial Bank of Qatar
Assessment
Current asset ratio
124%
121%
Doha Bank has more liquid asset than CBQ
Acid test ratio
46%
43%
Doha Bank has more liquid asset than CBQ
Cash ratio
46%
35%
Doha Bank has more liquid asset than CBQ
Financial leverage ratios
Doha Bank
Commercial Bank of Qatar
Assessment
Debt ratio
83.2%
85.4%
CBQ has more debts than Doha Bank
Debt-to-equity ratio
494.2%
583%
CBQ has more debts than Doha Bank
Efficiency ratios
Doha Bank
Commercial Bank of Qatar
Assessment
Cash turnover
70%
52%
Doha Bank is more efficient than CBQ
Total asset turnover
3.6%
3.2%
Doha Bank is more efficient than CBQ
Fixed asset turnover
315.3%
281%
Doha Bank is more efficient than CBQ
Receivables turnover
26.1%
24%
Doha Bank is more efficient than CBQ
Profitability ratios
Doha Bank
Commercial Bank of Qatar
Assessment
Net profit margin
55%
44.5%
Doha Bank is more profitable than CBQ
Return on assets
1.96%
1.42%
Doha Bank has better return on assets than CBQ
Operating income margin
55%
44.6%
Doha Bank is more profitable than CBQ
Return on investment
9.3%
5.87%
Doha Bank has better returns on investment than CBQ
Return on equity
11.65%
9.7%
Doha Bank has better returns on equity than CBQ
Gross profit margin
76.1%
61%
Doha Bank is more profitable than CBQ
Market value ratios
Doha Bank
Commercial Bank of Qatar
Assessment
Price earnings ratio
11.1
10.88
Doha Bank is better in value than CBQ
Market-to-Book ratio
1.35
1.25
Doha Bank is better in value than CBQ
Works Cited
Commercial Bank of Qatar. (31 December 2013). “Consolidated financial statements 31 December 2013.” Qatar Stock Exchange. Retrieved 14 May 2015 from http://www.qe.com.qa/pps/qe/qe+english+portal/Pages/Company+Profile+Pages/Financial+Statements+Details?com.tibco.ps.pagesvc.action=updateRenderState&rp.currentDocumentID=3fbacc09_14425b1d033_-3ea07f000001&rp.attachmentPropertyName=Attachment&rp.revisionNumber=1&com.tibco.ps.pagesvc.mode=resource&rp.redirectPage=-53343f7a_1279673d2a9_-78b60a000136&com.tibco.ps.pagesvc.targetPage=-53343f7a_1279673d2a9_-78ad0a000136
Doha Bank Q.S.C. (31 December 2013). “Consolidated financial statements for the year ended 31 December 2013.” Qatar Stock Exchange. Retrieved on 14 May 2015 from http://www.qe.com.qa/pps/qe/qe+english+portal/Pages/Company+Profile+Pages/Financial+Statements+Details?com.tibco.ps.pagesvc.action=updateRenderState&rp.currentDocumentID=2acdba71_143b91c7213_19d57f000001&rp.attachmentPropertyName=Attachment&rp.revisionNumber=2&com.tibco.ps.pagesvc.mode=resource&rp.redirectPage=-53343f7a_1279673d2a9_-78b60a000136&com.tibco.ps.pagesvc.targetPage=-53343f7a_1279673d2a9_-78ad0a000136 Read More
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