Bank of America Ratio Analysis - Case Study Example

In the paper, there are some of its ratios that show where it is performing well and where it needs to improve when compared to the industry average. The industry leader in the financial services industry which we will compare with is JP Morgan Chase. In terms of financial health, BAC has a Debt/Equity ratio of 0.91, JP Morgan has 1.37 while the industry average is 1.04. BAC is doing badly on this front when compared to the market leader and the industry average. As per leverage, BAC has 9.13, JP Morgan has 11.03 while the industry average is 11.50. This is similar to the debt/equity ratio.

Ratio

BAC

JP MORGAN CHASE

INDUSTRY AVERAGE

Return on equity

7.56

10.98

8.37

Return on assets

0.84

0.99

0.73

Income/employee

97.18k

107.10k

61.12k

In regards to returning on equity, the company has a lower return when compared to that of JP Morgan and the Industry. This is not the case on Return on Assets where the company has a higher return than the industry average but lower than that of the market leader JP Morgan Chase. This is the same projector on income per employee ratio where the company has a higher ratio at 97.18K than the industry average but lower to that of JP Morgan Chase.