Emirate Investment Bank Ratio Analysis

Emirate Investment Bank Ratio Analysis

Emirate Investment Bank Ratio Analysis

Name

Affiliation

Name of Ratio Formula Solution

Year 1 Solution

Year 2 2014 2013 % Change /Increase or Decrease

Return on Total Assets Net Income ÷ Average Total Assets 1266/879 1486/1266 186% 182% Decrease

Return on Equity Net Income available to Common

Stockholders ÷ Average Common

Stockholders’ Equity

2844/8466 8826/8466 68%

89% Increase

Age of Receivables Average AR (net) x 864 ÷ Net Credit

Sales 124*864/816 124*864/816 28 44 Increase

Inventory Turnover Cost of Sales ÷ Average Inventory

1896/826 1486/446 6.2 4.4 Decrease

Percentage change

in Sales

Current Year Net Sales – Prior Year Net Sales/Prior Year Net Sales 1646/446 1476/666 28% 29% Increase

Gross Profit

Percentage Net Sales – Cost of Sales ÷ Net Sales 916/6419 974/9688 18.4% 16% Decrease

Operating Expenses as a Percentage of

Sales Operating Expenses ÷ Net Sales 1976/4666 2866/9686 88% 21% Decrease

Bad Debt as a Percentage of Sales Bad Debt Expense ÷ Net Credit

Sales

186/716 246/986 81% 24.4% Decrease

Repairs and

Maintenance as a Percentage of Net Fixed Assets Repairs and Maintenance Expense ÷

Net Fixed Assets

2666/4466 2766/8666 26.9% 21.4% Decrease

Current Ratio Current Assets ÷ Current Liabilities 2666/28 8666/29 112% 116% Increase

Quick Ratio Current Assets – Inventory – Prepaid items ÷ Current Liabilities

464/128 766/266 46.4% 89.1% increase

Debt Ratio Debt ÷ Total Assets 1886/1666 1276/416 1.8% 8.6% increase

Times Interest

Earned Operating Income ÷ Annual Interest

Payments 2677/1746 8466/886 21.67% 44.46% increase

Debt Service

Coverage Net Income + Depreciation ÷ Annual

Principal Payments 176/486 196/466 84.2% 88.7% Increase

Introduction This examination about the assessment of the money related execution and monetary advantage to partners of both organizations will be achieved by breaking down the liquidity proportions that measures the capacity of both organizations to meet their fleeting commitments; resource administration degrees which focus the proficient utilization of advantages, for example, stock and records receivable; the dissolvability degrees that would help focus the capacity of the organization over a drawn out stretch of time with either obligation or value; and, at long last productivity proportions that measures the organization capacity to get obligation and value financing and its capacity to develop (Demyanyk & Hasan, 2010).Liquidity Ratios:Emirates Investment Bank’s capacity to meet its fleeting commitments by utilizing its most fluid resources stays solid as it conveys a significant sum in Working Capital, $17 Billion in 2014. Despite the fact that Emirates Investment Bank’s Working Capital has diminished in the course of the most recent three years regardless it gives Emirates Investment Bank an extraordinary capacity to meet any developing commitments or tap into trade in for spendable dough request to address any quick needs. Likewise, Emirates Investment Bank’s Current Ratio, at 1.6 in 2014, remaining parts at a sensible level. EIB’s Working Capital and Current Ratio of 1.0 is of concern flagging potential issues with liquidity. Finally, Emirates Investment Bank’s Current Cash Flow to Debt Ratio shows change for as far back as three years in their capacity to give income from operations exhibiting amazing liquidity, instead of EIB’s.Asset Management Ratios:Fast mechanical advances and developments describe the PC and programming industry. The danger of advantages getting to be out of date is a progressing concern in this industry. Emirates Investment Bank’s administration obviously shows their capacity to successfully use their benefits, for example, stock and records receivables, bringing about expansions in income, expanded stock turnover measures, diminishments in days in stock, and proficient gathering of their receivables. Emirates Investment Bank’s capital ventures have brought about a noteworthy 150% expansion in deals in the period 2009 through 2014. Emirates Investment Bank’s capacity to rapidly turnover their stock up to 71 times far surpasses EIB’s capacity to productively deal with their advantages. Emirates Investment Bank’s segment outsourcing method enhances their store network efficiencies bringing about a decrease in days in stock. Also, Emirates Investment Bank’s Receivable Collection Period has altogether diminished from 25 days in 2009 to 18 days in 2014. Emirates Investment Bank’s wholesaler assertions, retail locations, re-venders, online store, and their plans with outsider financers epitomize their effective receivable’s gathering routines. Interestingly, EIB’s merchants face low item edge difficulties, EIB’s online client base is low and an absence of retail locations is reflected in low records receivable turnover degree of 5.94 and a long receivables gathering time of 61 days.Solvency Ratios:Emirates Investment Bank has been powerful in keeping their liabilities low versus their huge ascent altogether resources. The Debt to Total Asset Ratio for Emirates Investment Bank has varied from 33% in 2009 to 34% in 2014 while EIB’s proportion of obligation to aggregate resources was 70% in 2014. This proportion, notwithstanding the upward increments in the Cash Debt Coverage Ratio for Emirates Investment Bank, backings Emirates Investment Bank’s capacity to reimburse its liabilities while evading resource liquidation. Emirates Investment Bank’s Cash Debt Coverage (1.12 times in 2014) surpasses the obliged limit of 0.20 times in 2014. Conversely, EIB’s money obligation scope proportion is a reason for concern the way things are at 0.15 times beneath the limit. Emirates Investment Bank’s solid budgetary position has made a domain where it appreciates considerable development in Free Cash Flow because of huge money gave from operations and an absence of recorded profit installments. Emirates Investment Bank’s current monetary position manages it the choice of acquiring long haul resources, keep on developing creative items and administrations, pay off current obligation and shockingly, a presentation of money profits (Vogel, 2010).Profitability Ratios:Emirates Investment Bank’s initiative exceeds expectations in the administration of their business as exhibited by the different degrees that measure productivity. Emirates Investment Bank had a 66% expansion in net deals from 2013 to 2014 and a 85% increment in net pay, which brought about a 3% ascent in Gross Profit Ratio and unassuming increments in the Profit Margin Ratio. Emirates Investment Bank’s capacity to use its advantages effectively, as obvious in the 35% increment in the Return on Assets Ratio from 2009 to 2014, exhibits the way that Emirates Investment Bank has the capacity hold significant pay after Cost of Goods Sold (COGS) are computed. Besides, Emirates Investment Bank’s capacity to convey creative items, for example, the iPhone and iPad, may have counterbalanced any increments in COGS that happened in numerous commercial enterprises because of the common debacles in the nations that supply parts. Interestingly, EIB’s efficiencies may have fallen behind Emirates Investment Bank’s as exhibited by a Gross Profit Rate, which more than 50% of Emirates Investment Bank’s degree, and EIB’s much lower Profit Margin Ratio. Also, EIB’s Return on Assets Ratio of 6% exhibits dreary efficiencies in utilizing speculations, particularly after an increment altogether resources coming about because of executing a sum of 15 acquisitions in the 2013-2014 period. Emirates Investment Bank’s certain execution is reflected in its Earnings Per Shares (EPS) estimations, which have expanded by 67% from 2009-2013 and 82% from 2013-2014. Emirates Investment Bank’s arrival on Common Stockholder’s Equity expanded 11% in 2013 and 17% in 2014which is more than twofold EIB’s proportion from 2014. This is a sign of how Emirates Investment Bank productively uses its cash to produce profit and boost its EPS.

Research Methodology

Research Design

A deductive approach will be adopted for the case of the study. Based on the case of Emirate investment bank, it will be vital to consider that the research will be undertaken based on the procedures and the rules as well as theories that are support employee motivation (Manzoor, 2012). The ideas raised by various scholars in the field of employee motivation will also be considered. This will help in enforcement research questions that will be used in the study. The theories that that are related to the study was used: banking theories were employed to

Research StrategyThis research study will take the case study strategy. This relayed on the ability that the case study will offer valuable outcome based on the sophisticated research questions. The case study has the chance to offer a reliable information based on the contextual variables available. In order to meet the success of the research study, it is worth to note that a survey method will be adopted (Vogel, 2010). Emirate investment bank will be the center of focus for the study since a lot of data will be collected here.

Data AnalysisAfter the collection of the data a clear and elaborate analysis will be undertaken to ensure that the data collected are able to be translated to results and further analyzed to get the best out of the information offered. This will be undertaken with a team of experts especially in the areas such as employee motivation. With this on board, Emirate investment bank will benefit from increased level of customer satisfaction and ultimately the company’s profits. Via motivation Emirate investment bank employees’ are able to boost their performance and later improvement of Customer Satisfaction (Vogel, 2010). ).

Reference

Demyanyk, Y., & Hasan, I. (2010). Financial crises and bank failures: a review of prediction methods. Omega, 38(5), 315-324.

Vogel, H. L. (2010). Entertainment industry economics: A guide for financial analysis. Cambridge University Press.