Glory Important Financial Ratios For Banks
The objective of the study is to estimate important financial ratios of major commercial banks in Oman and compare their financial management practices as indicated by the ratios.
Important financial ratios for banks. The current ratio is a liquidity ratio which estimates the ability of a company to pay back short-term obligations. Ideally they like to see you putting something in as well. The formula used for computing current ratio is.
Banks use financial ratios in evaluating a companys request for financing as these provide a lens into how a business is doing and its financial situation. It is a ratio that provides a way for the bank to determine how much of their money versus your own money is being used to grow the business. Financial ratios play a central role in the quantitative analysis of commercial banks.
Important Ratios for Evaluating the Banking Sector PE and PB Ratios The PE ratio is defined as market price divided by earnings per share EPS. The Leverage Ratio is calculated by dividing your total business liabilities by total equity. A higher current ratio indicates the higher capability of a company to pay back its debts.
Most ratios can be calculated using financial statements and they are used to analyze trends in a companys financial performance and how it compares to others in the same industry.