M.

Zahid Javaid
Cell # 03454399350
MBA
Finance
Financial Statement Analysis of

&
 Introduction of the Project
• This project is about the comparison of performance through
financial statements analysis of Faysal Bank Ltd. & Meezan Bank
Ltd will make me able to evaluate strategies of these organizations.

• All the information includes in this project are gathered annual

reports of these financial institutions.

• By showing the performance of two financial institutes will helpful

for stake holders to analyze & make decisions as well for the
investors to predict more accurate assessment for investment.

• The accurate and sound financial statement analysis is one the most
important and core element of fundamental analysis, which include
ratio, horizontal, vertical, and trend & industry analysis
 Objectives
• The aim of this project is to provide complete knowledge and
general idea about the financial system of Banks.

• To provide precious information to investor, depositor, stake

holder, stock holder, account holder and general public about
the past performance and evaluate the currant position through
financial statements analysis.

• More ever through financial statements analysis I shall be able

to work in the structured approach and present them in
appropriate form which will be easy understandable for the
management and the investor.
 Significance
• This analysis will provide valuable, constructive & useful
information to investor and other interested parties for making
decision about investment.

• The achievement of this task is to analyzing financial statement

to access historical performance, current financial position &
make prediction about future performance of banks.

• This project will to summarize the data into a form which is

easily understandable for the stakeholders. The stake holders
‘investors” who primarily interested in firms profitability and
increment is share price and the “creditors” are interested the
liquidity and solvency strength of the firm.
 Data Collection

Secondary sources utilized for data collection for this project

which included.
• Annual Reports through URL of following Banks
• Documents on various formats
• Company Profiles
• Case Study
• Various Articles
• Consult with Seniors
 Data Processing

• Microsoft word and excel work sheets be utilized to compute

the different ratio and analysis.
• This included tabulating, summarizing and presenting the data
graphically with the tools available in Microsoft office
• I also performed some manual work and calculations.
 Ratio Analysis
• Computing financial ratios is like taking a picture because the
results reflect a situation at just one point in time.
• The financial ratios are very effectively indicates the
performance and financial conditions of the firms.
• It is defined as the systematic use of ratio to interpret the
financial statements so that the strength and weaknesses of a
firm as well as its historical performance and current financial
condition can be determined.
The following ratios be calculated.
• Liquidity Ratios
• Leverage Ratios
• Profitability Ratios
• Activity Ratios
• Market Ratios
• Cash Flow Ratio
 Liquidity Ratios
The liquidity ratios evaluate the firm ability to meet its
short terms obligations. Followings are the liquidity
ratios.

1.Current Ratio
2.Sales to Working Capital
3.Working Capital
 Current Ratio:
• The current ratio highlights Faysal Bank Meezan Bank
the firm ability to cover short
term liabilities with its current Particulars 2007 2008 2009 2007 2008 2009

assets. Current
Assets
138,762,4
62
135,594,
508
176,797,8
78
66,145,5
96
83,395,5
55
121,561,1
87

• Current Ratio = Current Current 58,877,32 65,763,5 108,009,0 36,967,0 51,844,2 77,699,05
Liabilities 0 83 79 02 28 8
Assets / Current Liabilities
Current
• Interpretation: Ratio 2.36 2.06 1.64 1.79 1.61 1.56

• The current ratio of Faysal bank Current Ratio

& Meezan Bank for the year
2007, 2008 & 2009 is, 2.36, 2.50 2.36
2.06
2.06 & 1.64, 1.79, 1.61 & 1.56 2.00 1.79
1.61 1.64 1.56
respectively, compared to 1.50 Faysal Bank
Ratio

standard ratio 2:1 this of 1.00

Mezaan Bank

Meezan Bank ratio is then

0.50

Faysal Bank 0.00

2007 2008 2009
 Sales to Working Capital = Sales / Working
Capital
• In this ratio we compare the Faysal Bank Meezan Bank
working capital or net current
Particulars
assets with sales which are part of 2007 2008 2009 2007 2008 2009

11,610, 13,404, 16,957, 4,573,7 6,803,2 10,102,

the revenue. Sales 781 132 875 52 13 060

Working
• Interpretation:
79,885, 69,830, 68,788, 29,178, 31,551, 43,862,
Capital 142 925 799 594 327 129

Sales To
• The average turnover in working Working
Capital 0.15 0.19 0.25 0.16 0.22 0.23
capital of Faysal Bank is 19% &
Meezan Bank have 20% this Sales To Working Capital Ratio

shows the profitability of working

capital of Meezan Bank is slightly 0.30
0.25
0.23
0.25 0.22
high then Faysal Bank. 0.20
0.19
0.150.16 Faysal Bank
Ratio

0.15 Mezaan Bank

0.10
0.05
0.00
2007 2008 2009
 Working Capital = Current Assets –
Current Liabilities
• Arithmetically it is the Faysal Bank Meezan Bank
Particula
difference of Current Assets rs 2007 2008 2009 2007 2008 2009

Current
and Current Liabilities. Assets
138,762,
462
135,594,
508
176,797,
878
66,145,
596
83,395,
555
121,561,
187

• Interpretation:
Current 58,877,3 65,763,5 108,009, 36,967, 51,844, 77,699,0
Liabilities 20 83 079 002 228 58

Working
• The working capital ratio of
7988514 6983092 6878879 291785 315513 4386212
Capital 2 5 9 94 27 9

Faysal Bank limited is higher

Working Capital Ratio
which indicates that Faysal
bank has have sufficient 100000000.00

resources to meets its current 80000000.00

obligations as compare to 60000000.00 Faysal Bank

Ratio

Mezaan Bank
40000000.00

Meezan Bank Limited. 20000000.00

0.00
2007 2008 2009
 Leverage Ratios
• The leverage ratios highlights the organization methods of
finance as well provide the sketch how well firm have ability to
meet its financial obligations. Leverage Ratios include the
combinations of debts, assets, equity, & interest expense.
The leverage ratios include:
• Time Interest Earned
• Fixed Charges Coverage Ratio
• Debt Ratio
• Debt to Equity Ratio
• Current Worth / Net worth Ratio
• Total Capitalization Ratio
• Long Term asset to equity capital ratio
• Long term Assets versus Long term Debt
• Debt Coverage Ratio
 TIE Ratio = EBIT / Interest Charges

• EBIT (FBL) = Profit Before Tax + Faysal Bank Meezan Bank

Mark-up/ return/interest expenses Particulars

200
7 2008 2009 2007 2008 2009

• Net Operating Income of ( MBL ) = 10,1

57,2 10,251, 13,268, 3,721, 4,080, 6,709,
Profit Before Tax + Return on EBIT 19 292 386 156 645 639

deposits and other dues expenses. Interest or

Return on
• This ratio measures the extent to Deposits &
7,45
other dues
which operating income can decline Expenses
9,39
2
8,454,7
55
11,967,
885
2,451,
968
3,088,
334
4,969,
916

before the firm is unable to meet its T.I.E Ratio 1.4 1.2 1.1 1.5 1.3 1.4

annual interest cost.

T.I.E Ratio

• Interpretation: 1.60 1.40

1.50
1.40
1.30
• Meezan Bank Ratio is higher as 1.40
1.20
1.20
1.10
Faysal Bank
compare to Faysal Bank
1.00
Ratio

0.80 Mezaan Bank

0.60
Limited. This indicates Meezan 0.40
0.20
Bank has higher ability meet its 0.00
2007 2008 2009

current liability.
 Fixed Charges Coverage Ratio
• Fixed Charges Coverage Faysal Bank Meezan Bank

Ratio= Earnings before Particulars 2007

10,1
2008

10,2
2009

13,2
2007

3,72
2008

4,08
2009

6,70

Interest and Taxes (EBIT)/ Earning Before

interest & Taxes
57,2
19
51,2
92
68,3
86
1,15
6
0,64
5
9,63
9

Interest Expense & Return on Interest Expenses or

7,45
9,39
8,45
4,75
11,9
67,8
2,45
1,96
3,08
8,33
4,96
9,91
deposits and other dues Return on deposits and
other dues expenses. 2 5 85 8 4 6
expenses( Meezan Bank) Fix Charges Coverage
Ratio 1.36 1.21 1.11 1.52 1.32 1.35
• Net Operating Income of ( MBL
) = Profit Before Tax + Return
on deposits and other dues
expenses. Fix Charges Coverage Ratio

• Interpretation: 1.60
1.52
1.36 1.35
• Meezan Bank has high 1.40
1.20
1.21
1.32
1.11

fixed charges ratios while 1.00 Faysal Bank

Ratio

0.80 Mezaan Bank

the Faysal Bank ratio is 0.60
0.40
low and lower down 0.20
0.00
gradually each year 2007 2008 2009
 Debt Ratio = Total Debt / Total Assets

• The debt ratio relatively Faysal Bank Meezan Bank

compares the total debt of Particulars 2007 2008 2009 2007 2008 2009
company with its total Total Debt
125,120,
918
127,469,
378
168,082,
674
61,471,
903
79,301,
092
114,997,
275
assets, generally called the
Total
debt ratio Assets
141,277,
421
138,241,
486
180,865,
413
67,178,
559
85,276,
070
124,181,
734

• Interpretation:
Debt
• The debt ratio of Faysal and Ratio 0.89 0.92 0.93 0.92 0.93 0.93

Meezan Bank almost equal

in 2007 & 2008 Meezan
Bank debt ratio slightly Debt Ratio

higher to Faysal bank while

in 2008 Faysal bank Debt 0.94
0.93 0.92
0.93 0.93 0.93

ratio is little higher then 0.92

0.91
0.92
Faysal Bank
Meezan Bank Ltd.
Ratio

0.90 Mezaan Bank

0.89
0.89
0.88
0.87
0.86
2007 2008 2009
Debt to Equity Ratio = Total debt / Total Equity

• The debt to equity ratio explain Faysal Bank Meezan Bank

Particular
the combination of financial s 2007 2008 2009 2007 2008 2009

structure of company its provides Total Debt

125,12
0,918
127,46
9,378
168,08
2,674
61,471
,903
79,301
,092
114,99
7,275
detail equity and debt finance Total 16,156, 10,772, 12,782, 5,706, 5,974, 9,184,4
which company utilize to generate Equity 503 108 739 656 978 59

the revenue or continue its Debt To

Equity
operation. Ratio 7.74 11.83 13.15 10.77 13.27 12.52

• Interpretation: Debt To Equity Ratio

• By calculating the debt to equity 13.27 13.1512.52

14.00
ratio, we came to know that both 12.00 10.77
11.83

banks has high debt as compare to 10.00

7.74 Faysal Bank
8.00
equity which through light on
Ratio

Mezaan Bank
6.00
4.00
high leverage of banks 2.00
0.00
2007 2008 2009
 Current Worth to Net worth Ratio = Current
Worth / Net worth Ratio

• Current Worth = Total Current Faysal Bank Meezan Bank

Assets – Total Current Liabilities Particulars 2007 2008 2009 2007 2008 2009

• Net Worth = Total Assets - Total Current Worth

79,885,
142
69,830,
925
68,788,
799
29,178,
594
31,551,
327
43,862,
129

Liabilities Net Worth

16,156,
503
10,772,
108
12,782,
739
5,706,6
56
5,974,9
78
9,184,4
59

• Interpretation: Current To Net

Worth Ratio 4.94 6.48 5.38 5.11 5.28 4.78

• By computing the current Current To Net Worth Ratio

worth to net worth ratio, we
came to know that Faysal 7.00 6.48
6.00 5.28 5.38
bank has little higher ratio 5.00
4.945.11 4.78
Faysal Bank
4.00
Ratio

as compare to Mezeen Bank 3.00

Mezaan Bank

2.00
1.00
0.00
2007 2008 2009
 Total Capitalization Ratio = Long term debt /
long term debt + shareholders' equity

• Interpretation: Particulars
Faysal Bank

2007 2008 2009

Meezan Bank

2007 2008 2009

• The above calculation Long Term Debt

66,243,
598
61,705,
795
60,073,
595
2,594,
583
13,537,
509
6,988,1
96

shows that this ratio of Long Term Debt+ Shares 82,400, 72,477, 72,856, 8,301, 19,512, 16,172,
holders equity 101 903 334 239 487 655
Faysal Bank is higher then
Meezan Bank. Total Capitalization Ratio 0.80 0.85 0.82 0.31 0.69 0.43

Total Capitalization Ratio

1.00 0.85
0.80 0.82
0.80 0.69

0.60 Faysal Bank

Ratio

0.43
Mezaan Bank
0.40 0.31

0.20

0.00
2007 2008 2009
 Long Term asset equity capital ratio =
Long Term Assets
Equity Capital
• This ratio shows the ability Faysal Bank Meezan Bank

to meet the long term debts Particulars 2007 2008 2009 2007 2008 2009

Long Term 1,032,96 1,880,51

Interpretation: Assets
Equity
2,514,959

125,120,9
2,646,978

127,469,3
4,067,535

168,082,6
3

61,471,9
5

79,301,0
2,620,547

114,997,2
Capital 18 78 74 03 92 75

The above calculation shows Long Term

asset equity
the higher equity involve as capital 0.02 0.021 0.024 0.017 0.024 0.023

compare to long term assets.

This ratio of both banks is Long Term Assets To Equity Capital Ratio

lower, which means they don’t

0.03
have sufficient long term 0.03 0.02
0.02 0.02 0.02
0.02
assets. 0.02 0.02 Faysal Bank
Ratio

0.02 Mezaan Bank

0.01
0.01
0.00
2007 2008 2009
 Long term Assets vs. Long term Debt =
Long Term Assets/ Long Term Debts
This ratio assists to determine the Faysal Bank Meezan Bank
debt capacity of bank to its
Particulars 2007 2008 2009 2007 2008 2009
structure of working capital. 2,514,9 2,646,9 4,067,5 1,032, 1,880,5 2,620,
Long Term Assets 59 78 35 963 15 547

Interpretation: 66,243, 61,705, 60,073, 2,594, 13,537, 6,988,

Long Term Debts 598 795 595 583 509 196
The above calculation shows that
Long Term Assets
Meezan bank have higher ratio of V/S Long Term Debt 0.04 0.04 0.07 0.4 0.14 0.37

long term assets to meet its long

term debt as compare to Faysal
Bank which indicate the Meezan Long Term Assets V/S Long Term Debt Ratio

Bank have much investment in

0.50
long term assets as compare to 0.40
0.40
0.37

Faysal Bank. 0.30

Faysal Bank
Ratio

Mezaan Bank
0.20 0.14

0.10 0.07
0.04 0.04

0.00
2007 2008 2009
 Debt Coverage Ratio = Net Operating
Income / Total Debt

This ratio guide us to see ability Faysal Bank Meezan Bank

of company to measures to the Particulars 2007 2008 2009 2007 2008 2009

interest payment plus principle Net

Income
Operating 10,157,21
9
10,251,29
2
13,268,38
6
3,721,15
6
4,080,64
5 6,709,639
amount.
125,120,9 127,469,3 168,082,6 61,471,9 79,301,0 114,997,2

Interpretation: Total Debts 18 78 74 03 92 75

The Faysal bank has  Debt Coverage

Ratio 0.08 0.08 0.08 0.06 0.05 0.06

higher ratio as compare to

Meezan Bank but as we Debt Coverage Ratio

know Meezan Bank is

premier Islamic Bank and 0.10
0.08 0.08 0.08
0.08
work on profit and loss 0.06
0.06
0.05
0.06
Faysal Bank
base not interest base.
Ratio

Mezaan Bank
0.04

0.02

0.00
2007 2008 2009
 Profitability Ratios

• Profitability ratios make us able to access and view the

business ability to generate revenue as compare to its
expenses. These ratios highlight the operational performance
and guide concerning persons and viewers to understanding of
how the firm utilized its resources to generating profit.
The Profitability ratios include:
• Gross profit Ratio
• Return on Assets
• DuPont Return on Assets
• Operating Income Margin
• Operating Assets Turnover
• Return on Operating Assets
• Sales to Long Term Assets
• Return on Equity (ROE)
• Net Profit Margin
 Gross Profit Ratio = Gross Profit x 100
Net Sales

• The gross profit ratio shows Faysal Bank Meezan Bank

the how much amount Particulars 2007 2008 2009 2007 2008 2009

available from the sale to Gross Profit

4,151,38
9
4,949,37
7
4,989,99
0
2,121,7
84
3,714,8
79
5,132,14
4

meet the company expenses. Net Sales 11,610,7

81
13,404,1
32
16,957,8
75
4,573,7
52
6,803,2
13
10,102,0
60

Interpretation: Gross Profit

Margin 35.75 36.92 29.43 46.39 54.6 50.8
• The Meezan Bank has
higher gross profit ratio as Gross Profit Margin Ratio

compare to Faysal Bank. 60.00 54.60

50.80
The three years average 50.00
46.39
36.92
35.75
ratio of Faysal bank is 34.03 40.00
29.43
Faysal Bank
Ratio

30.00 Mezaan Bank

while Meezan bank has 20.00

10.00
50.60 % 0.00
2007 2008 2009
 Return on Assets (ROA) = Profit after Taxation /
Average Total assets x 100
• ROA, is percentage value of Faysal Bank Meezan Bank
profit after tax as compare to Particulars 2007 2008 2009 2007 2008 2009
average total assets of the Profit After
company. This is an important Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351
ratio for companies deciding Average
whether or not to initiate a new Total assets
128,373,0
00
139,759,4
54
159,553,4
50
56,808,7
80
76,227,3
15
104,728,9
02

project.
• Interpretation: Return
Assets
On
1.77 0.8 0.75 1.7 0.81 0.98
The above calculations shows the
after 2007 this ratio decreased Return On Assets Ratio
specially the ratio of Faysal bank
continuous decreases in the 3
years while Meezan Bank took 2.00 1.77 1.70
come back after huge decreasing 1.50
in the year of 2008. 0.98
Faysal Bank
Ratio

1.00 0.80 0.81 0.75 Mezaan Bank

0.50

0.00
2007 2008 2009
 DuPont Return on Assets =
Profit after taxation x 100
Total Assets
Faysal Bank Meezan Bank
• This ratio determine the impact of
Particulars 2007 2008 2009 2007 2008 2009
assets turnover on the on the
2,272,1 1,114,9 1,200,1 963,50 621,18 1,025,3
profit margin. Profit After Tax 08 52 59 1 7 51

141,277 138,241 180,865 67,178 85,276 124,181

Interpretation: Total Assets ,421 ,486 ,413 ,559 ,070 ,734

The Faysal bank ratio in  DuPont Return

on Assets 1.61 0.81 0.66 1.43 0.73 0.83

2007 is higher but its Dupont ROA Ratio

decreased much in 2009 2.00

1.61

while the Meezan Bank Ratio

1.50
1.43
Faysal Bank
0.83

ratio increased after

1.00 0.81 0.73 Mezaan Bank
0.66

0.50

downfall in 2008. 0.00

2007 2008 2009
 Operating Income Margin =
Operating Income x 100
Net Sales
Faysal Meezan
• The operating income margin Particulars Bank     Bank    

ratio shows the company   2007 2008 2009 2007 2008 2009

Operating
operating income by its own Income 10,157,219 10,251,292
13,268,38
6 3,721,156 4,080,645 6,709,639
operation. 16,957,87
Sales 11,610,781 13,404,132 5 4,573,752 6,803,213 10,102,060

• Interpretation:  Operating
Income
Margin
• The Faysal bank operating 87.48 76.48 78.24 81.36 59.98 66.42

income margin is higher as

Operating Income Margin Ratio
compare to Meezan which is
shown in above calculations. 100.00 87.48
81.36 78.24
76.48
80.00 66.42
59.98
Faysal Bank
60.00
R atio

Mezaan Bank
40.00

20.00

0.00
2007 2008 2009
 Operating Assets Turnover =
Operating Assets x 100
Net Sales
Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

Operating Assets 13,095,442 12,451,282 11,723,614 10,406,540 8,989,199 16,064,274

Net Sales 11,610,781 13,404,132 16,957,875 4,573,752 6,803,213 10,102,060

Operating Assets
Turnover 112.79 92.89 69.13 227.53 132.13 159.02

Operating Assets Turn Over

250.00 227.53

200.00
159.02
132.13 Faysal Bank
150.00
Ratio

112.79
92.89 Mezaan Bank
100.00 69.13
50.00

0.00
2007 2008 2009
 Return on Operating Assets
= Profit after Taxation x 100
Operating assets
Faysal Bank Meezan Bank
• The return of operating assets
ratio use to determine activity of Particulars 2007 2008 2009 2007 2008 2009
those assets, which utilize to 2,272,10 1,114,95 1,200,15 621,18 1,025,
generate the revenue. This ratio Net Profit After Tax 8 2 9 963,501 7 1
gives us the result of the ongoing 13,095,4 12,451,2 11,723,6 10,406,5 8,989,1 16,064
Operating Assets
campaign to eliminate 42 82 14 40 99 74

unnecessary assets. Return on Operating

• Interpretation: Assets 17.35 8.95 10.24 9.26 6.91 6.38

The return of operating Return On Operating Assets

assets of Faysal Bank is
higher then Meezan Bank 20.00 17.35

which indicates that Faysal 15.00

bank is much efficiently use 9.26

10.24 Faysal Bank
Ratio

8.95
10.00 Mezaan Bank
its operating assets. 5.00
6.91 6.38

0.00
2007 2008 2009
 Sales to Fixed Assets = Net Sales / Fixed
Assets
• This ratio is indicates that how Faysal Bank Meezan Bank
much sales are contributed by Particulars 2007 2008 2009 2007 2008 2009
investment in fixed Assets. 11,610,7 13,404,1 16,957,8 4,573,7 6,803,2 10,102,0
Net Sales 81 32 75 52 13 60

• Interpretation: Long
Assets
Term 2,514,95
9
2,646,97
8
4,067,53
5
1,032,9
63
1,880,5
15
2,620,54
7

The sales to fixed assets Sales to Long

ratio indicate that Term Assets 4.62 5.06 4.17 4.43 3.62 3.85

contribution of fixed Sales To Long Term Assets

assets in is higher of
Faysal Bank as compare 6.00
5.00 4.62 4.43
5.06
4.17
3.85
to Meezan Bank 4.00 3.62
Faysal Bank
Ratio

3.00 Mezaan Bank

Limited. 2.00
1.00
0.00
2007 2008 2009
 Return on Total Equity =
Profit after taxation x 100
Total Equity
• Return on Equity measures the Faysal Bank Meezan Bank
amount of Net Income earned by
Particulars 2007 2008 2009 2007 2008 2009
utilizing money of Total common
equity. It is the most important of Profit After Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

the “Bottom line” ratio. By this, Total Equity

16,156,50
3
10,772,10
8
12,782,73
9 5,719,910 6,341,097 9,090,535
we can find out how much the
shareholders are going to get for Return on
their shares. Total Equity 14.06 10.35 9.39 16.84 9.8 11.28

Interpretation: Return On Total Equity

• The return on equity falls
after 2007 of both banks but 20.00
16.84

the average return on equity 15.00

14.06
11.28 Faysal Bank
of Meezan Bank is higher
10.359.80
9.39
Ratio

10.00 Mezaan Bank

then Faysal bank in last 5.00

three years. 0.00

2007 2008 2009
 Net Profit margin = Net Profit / Sales x
100
• Net Profit Margin shows us the Faysal Bank Meezan Bank
net profit that the business is
Particulars 2007 2008 2009 2007 2008 2009
earning per dollar of sales.
Net Profit
• Interpretation: 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

The net profit margin falls down Sales 11,610,781 13,404,132 16,957,875 4,573,752 6,803,213 10,102,060

of both banks after 2007 but the

average net profit margin of Net Profit
Margin
Meezan bank is higher then the 19.57 8.32 7.08 21.07 9.13 10.15

Faysal Bank. Net Profit Margin

25.00
21.07
19.57
20.00
Faysal Bank
15.00
Ratio

10.15 Mezaan Bank

10.00 8.32 9.13
7.08

5.00

0.00
2007 2008 2009
 Activity Ratios

• Activity ratio are sometimes are called efficiency ratios.

Activity ratios are concerned with how efficiency the assets of
the firm are managed. These ratios express relationship
between level of sales and the investment in various assets
inventories, receivables, fixed assets etc.

The Activity ratios include:

Total Asset Turnover

 Total Asset Turnover =
Total Sales / Total Assets
• The amount of sales Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

generated for every dollar's 11,610,78 13,404,13 16,957,87 10,102,0

worth of assets. It is Net Sales 1 2 5 4,573,752 6,803,213 0

141,277,4 138,241,4 180,865,4 61,471,90 79,301,09 114,997,

calculated by dividing sales Total Assets 21 86 13 3 2 75

in dollars by assets in dollars. Assets

Asset turnover measures a Turnover 0.08 0.1 0.09 0.07 0.09 0.09

firm's efficiency at using its Assets Turnover Ratio

assets in generating sales or
revenue - the higher the 0.12
0.10
0.10 0.09 0.09 0.09
number the better. 0.08
0.08
0.07 Faysal Bank
Ratio

0.06 Mezaan Bank

0.04
0.02
0.00
2007 2008 2009
 Market Ratios
• Market Value Ratios is useful to measures the company
performance it relates to an observable market value, the stock
price, to book values obtained from the firm's financial
statements. The Market ratios assist us to quick comparison
among the competitors.
• The Market Ratios Include:
1. Dividend per Share – DPS
2. Earning Per Share- EPS
3. Price / Earning Ratio
4. Dividend Payout Ratio
5. Dividend Yield
6. Book Value per Share
 Dividend per Share =
Total amount of Dividend
Number of outstanding shares
• Interpretation: Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

• Meezan bank paying
continuously dividend Total Amount
of Dividend
709,1
17
870,2
66 -
618,0
70
2,278,1
80
1,724,0
87

to its share holders in No. Of Shares 529,6

29
609,0
91 609,091
492,5
96 509,005 599,185
last three years while D.P.S 1.34 1.43 0 1.25 4.48 2.88

Faysal bank did not pay

dividend in 2009. The Dividen Per Share Ratio
average rate of paying
dividend is also higher 5.00
4.00
4.48

of Meezan bank in last 3.00

2.88 Faysal Bank
Ratio

Mezaan Bank

three years. 2.00

1.00
1.34 1.25 1.43

0.00
0.00
2007 2008 2009
 Earning Per Share =
Profit after Taxation
Number of Shares
• Interpretation: Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

The EPS of Faysal bank is Profit After
too much higher then Tax 2,272,108 1,114,952 1,200,159 963,501 621,187 1,025,351

No. Of
Meezan Bank in 2007 as Shares 529,629 609,091 609,091 492,596 509,005 599,185

well the average EPS also E.P.S 4.29 1.83 1.97 1.96 1.22 1.71

higher then Meezan bank in

last three years.
Earning Per Share

5.00 4.29
4.00
Faysal Bank
3.00
Ratio

Mezaan Bank
1.96 1.83 1.97 1.71
2.00 1.22
1.00
0.00
2007 2008 2009
 Price / Earning Ratio =
Stock Price Per Share
Earning Per Shares
• Interpretation: Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

The price earning ratio of
Stock Price Per
Meezan Bank is too much Share 65.94 6.29 8.9 29.64 21.47 15.73

higher then Faysal bank in Earning

share
Per
4.29 1.83 1.97 1.96 1.22 1.71
last three years. One Price Earning 15.37 3.44 4.52 15.12 17.6 9.2
important point is that PE
ratio of Faysal bank falls too Price Earning Ratio
much in 2008 as compare to
2007. 20.00
15.3715.12
17.60

15.00 Faysal Bank

9.20 Mezaan Bank
Ratio

10.00
4.52
5.00 3.44

0.00
2007 2008 2009
 Dividend Payout Ratio =
Dividend per Share
Earning per Share
• The dividend payout ratio is an
Faysal Bank Meezan Bank
indicator of how well earnings
support the dividend payment. Particulars 2007 2008 2009 2007 2008 2009
Dividend Per
• Interpretation: Share 1.34 1.43 0 1.25 4.48 2.88
Earning Per
• The dividend payout ratio of Share 4.29 1.83 1.97 1.96 1.22 1.71
Dividend Pay
Meezan Bank is higher then Out 0.31 0.78 0 0.64 3.67 1.68

Faysal bank in last three

years. One important point Dividend Pay Out Ratio

is that Faysal Bank didn’t 3.67

4.00
pay dividend to its shares 3.00 Faysal Bank

holders in 2009. Mezaan Bank

Ratio

2.00 1.68

0.64 0.78
1.00
0.31
0.00
0.00
2007 2008 2009
 Dividend Yield = Dividend per Share
Share Price

• Interpretation: Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

• The dividend yield Dividend Per
Share 1.34 1.43 - 1.25 4.48 2.88

ratio of Meezan Earning Per Share 10 10 10 10 10 10

Bank is higher as Dividend Yields 0.134 0.143 0 0.125 0.448 0.288

compare to Faysal
Bank in last three Dividend Yield Ratio

years. 0.50
0.40
0.45

Faysal Bank
0.29
0.30 Mezaan Bank
Ratio

0.20 0.13 0.13 0.14

0.10
0.00
0.00
2007 2008 2009
 Book Value per Share =
Shareholders’ Equity
Share Capital
• The book value per share Faysal Bank Meezan Bank

defined as the common Particulars 2007 2008 2009 2007 2008 2009

shareholder's Equity Share

Equity
Holders 16,156,5
03
10,772,1
08
12,782,7
39
5,719,9
10
6,341,0
97
9,090,5
35
divided by the 5,296,44 5,296,44 6,090,91 3,779,8 4,925,9 6,650,0
outstanding shares at the Shares Capital 5 5 1 97 61 48

end of the most recent Book Value Per

fiscal quarter. Comparing Share 3.05 2.03 2.1 1.51 1.29 1.37

the market value to the

book value can indicate Book Value Per Share

whether or not the stock

in overvalued or 3.50
3.00
3.05

undervalued. 2.50 2.03 2.10 Faysal Bank

Ratio

2.00 1.51 Mezaan Bank

1.29 1.37
1.50
1.00
0.50
0.00
2007 2008 2009
 Operating Cash Flow to Total Debt =
Operating Cash Flow/Total Debt

• Interpretation: Faysal Bank Meezan Bank

Particulars 2007 2008 2009 2007 2008 2009

• The Operating Cash flow Operating Cash 13,981,44 7,465,00 3,320,19 13,966,35
to total debt ratio of Flow 7,280,585 1,907,327 9 0 0 0
125,120,9 127,469,3 168,082,6 61,471,9 79,301,0 114,997,2
Meezan bank is higher Total Debt 18 78 74 03 92 75

then faysal bank. Which

  0.06 0.01 0.08 0.12 0.04 0.12
indicate that Meezan
Bank has much cash in
Operating Cash Flow To Total Debt Ratio
operation as compare to
Faysal Bank. 0.14 0.12 0.12
0.12
0.10 Faysal Bank
0.08
0.08 Mezaan Bank
Ratio

0.06
0.06 0.04
0.04
0.01
0.02
0.00
2007 2008 2009
 Operating Cash Flow per Share =
Operating cash flow / Total Shares
• Operating Cash Flow per Faysal Bank Meezan Bank
Share: Particulars 2007 2008 2009 2007 2008 2009

• This ratio guide to measure the Operating Cash 7,280,5 1,907,3 13,981,4 7,465,0 3,320,1 13,966,3
Flow
company financial strength. This 85 27 49 00 90 50
492,59 509,00
ratio can be calculated operating Total Shares 529,629 609,091 609,091 6 5 599,185

cash flow divided by total no. of

  13.75 3.13 22.95 15.15 6.52 23.31
common shares.
Interpretation:
Operating Cash Flow To Total share Ratio
• The Operating Cash flow to per
share ratio of Meezan bank is 25.00
23.31
22.95
higher then faysal bank. This is 20.00
15.15 Faysal Bank
shown in above graph. 15.00
13.75
Mezaan Bank
Ratio

10.00 6.52
5.00 3.13

0.00
2007 2008 2009
 Horizontal Analysis

• When an analyst compares financial information for two or more years for
a single company, the process is referred to as horizontal analysis, since
the analyst is reading across the page to compare any single line item.
Methods of financial statement analysis generally involve comparing
certain information. It is a procedure in fundamental analysis in which is
an analyst compares ratios or line items in a company's financial statements
over a certain period of time. The analyst will use his judgment when
choosing a particular timeline; however, the decision is often based on the
investing time horizon under consideration.
 Income Statement Of Meezan Bank Limited
  Horizontal Analysis
Description 2007 2008 2009 2007 2008 2009
  Rs.In ,000 Rs.In ,000
Profit / return earned on
financings, investments and
placements 4,573,752 6,803,213 10,102,060 100 148.74 220.87
Return on deposits and other dues
expensed 2,451,968 3,088,334 4,969,916 100 125.95 202.69
Net spread earned 2,121,784 3,714,879 5,132,144 100 175.08 241.88
Provision against non-performing
financings (net) 435,018 428,436 1,430,536 100 98.49 328.85
Provision for diminution in value
of investments and impairment 878 288,884 88,640 100 32,902.51 10,095.67
Bad debts written off directly - - - - - -
  435,896 717,320 1,519,176 100 164.56 348.52
Net spread after provisions 1,685,888 2,997,559 3,612,968 100 177.80 214.31
OTHER INCOME            
Fee, commission and brokerage
income 321,685 431,725 529,260 100 134.21 164.53
Dividend income 104,345 243,585 189,973 100 233.44 182.06
Income from dealing in foreign
currencies 392,319 304,692 752,904 100 77.66 191.91
Capital gain / (loss) on sale of
investments - net 533,093 47,001 76,160 100 8.82 14.29
Unrealised loss on held for
Impairment on reclassification of
securities from held for trading to
available for sale securities - (362,751) - - #DIV/0! -
Other income 27,904 66,670 49,507 100 238.93 177.42
Total other income 1,347,893 707,908 1,597,804 100 52.52 118.54
  3,033,781 3,705,467 5,210,772 100 122.14 171.76
OTHER EXPENSES            
Administrative expenses 1,755,761 2,626,606 3,530,161 100 149.60 201.06

Other provisions / write offs 5,948 86,263 (60,859) 100 1,450.29 (1,023.18)
Other charges 2,884 287 1,747 100 9.95 60.58
Total other expenses 1,764,593 2,713,156 3,471,049 100 153.76 196.71
  1,269,188 992,311 1,739,723 100 78.18 137.07
Extraordinary / unusual items - - -      
PROFIT BEFORE TAXATION 1,269,188 992,311 1,739,723 100 78.18 137.07
Taxation - Current 271,452 314,790 1,440,374 100 115.97 530.62
Prior years - - - - - -

Deferred 34,235 56,334 (726,002) 100 164.55 (2,120.64)

  305,687 371,124 714,372 100 121.41 233.69
PROFIT AFTER TAXATION 963,501 621,187 1,025,351 100 64.47 106.42
Unappropriated profit brought
forward 448,427 1,219,228 570,114 100 271.89 127.14
Profit before appropriations 1,411,928 1,840,415 1,595,465 100 130.35 113.00
Basic and diluted earnings per
 Balance Sheet Meezan Bank Limited

  Horizontal Analysis
  2007 2008 2009 2007 2008 2009
ASSETS Rs.In ,000 Rs.In ,000
Cash and balances with treasury
banks 5,644,028 5,763,710 8,387,432 100 102.12 148.61
Balances with other banks 3,729,549 1,344,974 5,260,467 100 36.06 141.05
Due from financial institutions 8,850,000 18,108,000 34,499,500 100 204.61 389.82
Investments 10,535,186 14,286,949 23,290,309 100 135.61 221.07
Financings 34,576,339 39,768,481 44,188,066 100 115.02 127.80
Operating fixed assets 1,032,963 1,880,515 2,416,375 100 182.05 233.93
Deferred tax asset - - 204,172 - - #DIV/0!
Other assets 2,810,494 4,123,441 5,935,413 100 146.72 211.19
  67,178,559 85,276,070 124,181,734 100 126.94 184.85
LIABILITIES            
Bills payable 1,192,160 1,057,017 1,249,210 100 88.66 104.79
Due to financial institutions 2,415,606 4,008,496 8,468,425 100 165.94 350.57
Deposits and other accounts 54,582,353 70,233,875 100,333,051 100 128.68 183.82
Sub-ordinate loan - - - - - -
Liabilities against assets subject
to finance leases - - - - - -
Deferred tax liabilities 430,377 453,038 - 100 105.27 -
Other liabilities 2,851,407 3,548,666 4,946,589 100 124.45 173.48
  61,471,903 79,301,092 114,997,275 100 129.00 187.07
REPRESENTED BY            
             
Share capital 3,779,897 4,925,961 6,650,048 100 130.32 175.93
Reserves 720,785 845,022 1,050,092 100 117.24 145.69
Unappropriated profit 1,219,228 570,114 1,390,395 100 46.76 114.04
  5,719,910 6,341,097 9,090,535 100 110.86 158.93
Deficit on revaluation of
investments (13,254) (366,119) 93,924 100 2,762.33 (708.65)
  5,706,656 5,974,978 9,184,459 100 104.70 160.94
 Cash Flow Statement Meezan Bank Limited
  2007 2008 2009 2007 2008 2009
CASH FLOW FROM
OPERATING ACTIVITIES Rs.In ,000 Horizontal Analysis
Profit before taxation 1,269,188 992,311 1,739,723 100 78.18 137.07
Dividend income (104,345) (243,585) (189,973) 100 233.44 182.06
  1,164,843 748,726 1,549,750 100 64.28 133.04
Adjustments for non-cash
charges            
Depreciation 124,420 210,095 307,438 100 168.86 247.10
Amortisation 14,282 21,909 31,853 100 153.40 223.03
Provision against non-performing
financings (net) 435,018 428,436 1,430,536 100 98.49 328.85
Provision for diminution in the
value of investments on associates -
listed - 287,046 - - - -
on associates - unlisted 878 1,838 - 100 209.34 -
on others - - 88,640 - - 100.00
Loss on reclassification of
securities from held for trading to
available for sale securities - 362,751 - - - -
Gain on sale of fixed assets (6,173) (12,744) (13,123) 100 206.45 212.59
Gain on securities with deferred
purchase commitments - (23,014) - - 100.00 -
Unrealised loss on held for trading
investments 31,453 23,014 - 100 73.17 -
  599,878 1,299,331 1,845,344 100 216.60 307.62
(Increase) / decrease in operating assets            

Due from financial institutions (5,150,000) (9,258,000) (16,391,500) 100 179.77 318.28

Held for trading securities (121,122) (51,142) 151,096 100 42.22 (124.75)

Financings (7,980,341) (5,620,578) (6,089,871) 100 70.43 76.31

Other assets (761,301) (1,289,889) (1,807,316) 100 169.43 237.40

  (14,012,764) (16,219,609) (24,137,591) 100 115.75 172.25

Increase / (decrease) in operating
liabilities            

Bills payable 628,932 (135,143) 192,193 100 (21.49) 30.56

Due to financial institutions (1,869,606) 1,592,890 4,459,929 100 (85.20) (238.55)

Deposits and other accounts 20,132,912 15,651,522 30,099,176 100 77.74 149.50

Other liabilities 843,944 386,904 251,999 100 45.84 29.86

  19,736,182 17,496,173 35,003,297 100 88.65 177.36

  7,488,139 3,324,621 14,260,800 100 44.40 190.45

Income tax paid (23,139) (4,431) (294,450) 100 19.15 1,272.53

Net cash flow from operating activities 7,465,000 3,320,190 13,966,350 100 44.48 187.09
CASH FLOW FROM INVESTING ACTIVITIES            

Net investments in held to maturity securities (300,652) (114,129) 568,481 100 37.96 (189.08)

available for sale securities (6,313,829) (4,196,312) (9,042,992) 100 66.46 143.23

listed associated undertakings (973,726) (451,367) - 100 46.35 -

Unlisted associated undertakings (3,000)     100 - -

Dividends received 101,745 243,541 185,317 100 239.36 182.14

Investments in operating fixed assets (643,739) (1,096,419) (892,838) 100 170.32 138.70

Sale proceeds of property and equipment disposed

off 9,509 29,607 30,810 100 311.36 324.01

Net cash flow from investing activities (8,123,692) (5,585,079) (9,151,222) 100 68.75 112.65

CASH FLOW FROM FINANCING ACTIVITIES            

Dividend paid - (4) - - 100.00 -

Proceeds from right issue   - 1,724,087 - 100.00 -

  - (4) 1,724,087 - 100.00 -

Net increase / (decrease) in cash and cash equivalents (658,692) (2,264,893) 6,539,215 100 343.85 (992.76)

Cash and cash equivalents as at January 1 10,032,269 9,373,577 7,108,684 100 93.43 70.86

Cash and cash equivalents as at December 31 9,373,577 7,108,684 13,647,899 100 75.84 145.60
 Income Statement Faysal Bank Limited
  Horizontal Analysis
Description 2007 2008 2009 2007 2008 2009
  Rs.In ,000      
  11,610,781 13,404,132 16,957,875 100 115.45 146.05
Mark-up / return / interest
earned 7,459,392 8,454,755 11,967,885 100 113.34 160.44
Mark-up / return / interest
expensed 4,151,389 4,949,377 4,989,990 100 119.22 120.20
Net mark-up / interest income 1,797,432 1,561,016 1,966,414 100 86.85 109.40
Provision against non-
performing loans and advances 74,537 (104,822) (26,723) 100 (140.63) (35.85)
(Reversal) / Provision for
consumer loans - general 207,075 591,168 252,192 100 285.48 121.79
Provision for diminution in the
value of investments Bad debts
written off directly - - - - - -
Grand Total 2,079,044 2,047,362 2,191,883 100 98.48 105.43
Net mark-up / interest income
after provisions 2,072,345 2,902,015 2,798,107 100 140.04 135.02
Non mark-up / interest income            
Fee, commission and brokerage
income 743,913 814,001 885,124 100 109.42 118.98
Dividend income 1,221,217 1,207,366 667,926 100 98.87 54.69
Income from dealing in foreign
currencies 313,597 347,114 400,477 100 110.69 127.70
(Loss) / Gain on sale of securities 1,115,613 (133,881) 824,621 100 (12.00) 73.92

Unrealized (loss) / gain on

revaluation of investments classified
as held for trading 2,984 (3,410) (45,674) 100 (114.28) (1,530.63)

Other income 43,821 79,403 80,591 100 181.20 183.91

Total non mark-up / interest income 3,441,145 2,310,593 2,813,065 100 67.15 81.75

  5,513,490 5,212,608 5,611,172 100 94.54 101.77

Non mark-up / interest expenses            

Administrative expenses 2,799,747 3,257,843 4,284,086 100 116.36 153.02

Other provisions 6,061 96,864 (6,444) 100 1,598.15 (106.32)

Other charges 9,855 61,364 33,029 100 622.67 335.15

Total non mark-up / interest

expenses 2,815,663 3,416,071 4,310,671 100 121.32 153.10

  2,697,827 1,796,537 1,300,501 100 66.59 48.21

Extraordinary items / unusual items - - -      

Profit before taxation 2,697,827 1,796,537 1,300,501 100 66.59 48.21

Taxation – Current 282,381 155,956 1,157,443 100 55.23 409.89

Prior years (48,433) 100,000 2,823,492 100 (206.47) (5,829.69)

Deferred 191,771 425,629 (3,880,593) 100 221.95 (2,023.56)

  425,719 681,585 100,342 100 160.10 23.57

Profit after taxation 2,272,108 1,114,952 1,200,159 100 49.07 52.82

             

Basic and diluted earnings

per share - Rupees 4.29 1.83 1.97      
 Balance Sheet Faysal Bank Limited Horizontal Analysis
2007 2008 2009 2007 2008 2009
ASSETS Rs.In ,000  
Cash and balances with
treasury banks 6,872,032 8,927,524 8,427,202 100 129.91 122.63
Balances with other banks 3,708,451 876,780 508,795 100 23.64 13.72
Lending's to financial
institutions 7,078,102 2,861,401 15,017,826 100 40.43 212.17
Investments 31,553,108 30,186,168 56,531,338 100 95.67 179.16
Advances 87,346,401 89,758,789 91,346,001 100 102.76 104.58
Operating fixed assets 2,514,959 2,646,978 2,787,617 100 105.25 110.84
Deferred tax assets - net - - 1,279,918 - - 100.00
Other assets 2,204,368 2,983,846 4,966,716 100 135.36 225.31
  141,277,421 138,241,486 180,865,413 100 97.85 128.02
LIABILITIES            
Bills payable 2,406,927 1,536,517 1,465,451 100 63.84 60.88
Borrowings from financial
institutions 9,995,855 13,027,468 34,985,766 100 130.33 350.00
Deposits and other accounts 102,067,422 102,776,793 123,655,188 100 100.70 121.15
Sub-ordinated loans 1,000,000 999,600 999,200 100 99.96 99.92
Liabilities against assets
subject to finance lease 7,827 4,103 - 100 52.42 -
Deferred tax liabilities - net 2,691,466 2,483,355 - 100 92.27 -
Other liabilities 6,951,421 6,641,542 6,977,069 100 95.54 100.37
  125,120,918 127,469,378 168,082,674 100 101.88 134.34
NET ASSETS 16,156,503 10,772,108 12,782,739 100 66.67 79.12

REPRESENTED BY            

Share capital 5,296,445 5,296,445 6,090,911 100 100.00 115.00

Reserves 3,567,033 3,790,023 4,030,056 100 106.25 112.98

Unappropriated profit 1,481,668 1,049,519 1,215,179 100 70.83 82.01

  10,345,146 10,135,987 11,336,146 100 97.98 109.58

Surplus on revaluation of
assets 5,811,357 636,121 1,446,593 100 10.95 24.89

  16,156,503 10,772,108 12,782,739 100 66.67 79.12

 Cash Flow Statement Faysal Bank Limited
  2007 2008 2009 2007 2008 2009
CASH FLOW FROM
OPERATING ACTIVITIES Rs.In ,000 Horizontal Analysis
Profit before taxation 2,645,591 1,808,047 1,300,501 100 68.34 49.16
Less: Dividend income (1,191,521) (1,197,862) (667,926) 100 100.53 56.06
Profit on available for sale
securities (1,333,820) (1,766,069) (4,028,665) 100 132.41 302.04
  120,250 (1,155,884) (3,396,090) 100 (961.23) (2,824.19)
Adjustments for :            
Depreciation / Amortisation 339,198 447,630 610,677 100 131.97 180.04
Provision against non-
performing advances 1,797,432 1,561,016 1,966,414 100 86.85 109.40
(Reversal) / Provision for
consumer loans - general 74,537 (104,822) (26,723) 100 (140.63) (35.85)
Provision for diminution in
value of investments 207,075 591,168 252,192 100 285.48 121.79
Provision for other assets 6,061 96,864 (6,444) 100 1,598.15 (106.32)
Unrealised loss / (gain) on
revaluation of held-for-trading
financial instruments (2,984) 3,410 45,674 100 (114.28) (1,530.63)
Gain on disposal of fixed
assets (3,171) (10,761) (5,788) 100 339.36 182.53
Assets charged off -
intangibles            
Finance charges on leased
assets 725 208 22 100 28.69 3.03
Exchange gain (349,848) (535,801) (89,022) 100 153.15 25.45
(Increase) / Decrease in operating assets            

Lending's to financial institutions (1,669,897) 3,416,701 (11,856,425) 100 (204.61) 710.01

Held-for-trading securities 26,960 (19,104) (1,410,590) 100 (70.86) (5,232.16)
Advances (14,749,726) (3,868,582) (9,773,624) 100 26.23 66.26
Other assets (662,103) (820,408) (1,449,382) 100 123.91 218.91
  (17,054,766) (1,291,393) (24,490,021) 100 7.57 143.60

Increase / (Decrease) in operating liabilities          

Bills payable (2,109,198) (870,410) (71,066) 100 41.27 3.37

Borrowings from financial institutions (4,969,182) 3,031,613 21,958,298 100 (61.01) (441.89)
Deposits 27,684,965 713,229 20,878,395 100 2.58 75.41
Other liabilities 1,793,903 (228,085) 132,746 100 (12.71) 7.40
  22,400,488 2,646,347 42,898,373 100 11.81 191.51
  7,534,997 2,247,982 17,759,264 100 29.83 235.69
Income tax paid (254,412) (340,655) (3,777,815) 100 133.90 1,484.92

Net cash flow from operating activities 7,280,585 1,907,327 13,981,449 100 26.20 192.04
CASH FLOW FROM INVESTING
ACTIVITIES            

Net investments in available-for-sale securities and

associates (7,416,149) 3,778,490 (23,588,302) 100 (50.95) 318.07

Net investments in held-to-maturity securities - (8,805,245) 5,250,017   100.00 (59.62)

Dividends received 1,198,318 1,183,371 645,201 100 98.75 53.84
Profit received on available for sale securities 1,330,329 1,724,803 3,804,699 100 129.65 286.00
Fixed capital expenditure (634,972) (611,191) (782,371) 100 96.25 123.21

Sale proceeds from disposal of fixed assets 23,378 42,304 36,843 100 180.96 157.60

Net cash flow from investing activities (5,499,096) (2,687,468) (14,633,913) 100 48.87 266.11
CASH FLOW FROM FINANCING
ACTIVITIES            

Payments of lease obligations (7,562) (3,932) (4,125) 100 52.00 54.55

Sub-ordinated loan 250,000 (400) (400) 100 (0.16) (0.16)

Dividend paid to minority shareholders (24,386) (6,336) - 100 25.98 -

Dividends paid (1,059,941) (1,321,174) (340) 100 124.65 0.03

Net cash used in financing activities (841,889) (1,331,842) (4,865) 100 158.20 0.58

(Decrease) / Increase in cash and cash equivalents 939,600 (2,111,983) (657,329) 100 (224.77) (69.96)

Cash and cash equivalents at beginning of the year as

previously reported 10,091,038 11,380,486 9,804,304 100 112.78 97.16

Effects of exchange rate changes on cash and cash

equivalents 349,848 535,801 89,022 100 153.15 25.45

Cash and cash equivalents at beginning of the year as

restated 10,440,886 11,916,287 9,893,326 100 114.13 94.76

Cash and cash equivalents at end of the year 11,380,486 9,804,304 9,235,997 100 86.15 81.16
 Vertical Analysis
• The term of vertical analysis use to calculates each item on a
single financial statement as a percentage of a total. This term
applies because each year's figures are listed vertically on a
financial statement. The total used by the analyst on the income
statement is net sales revenue, while on the balance sheet it is
total assets. This approach to financial statement analysis, also
known as component percentages, produces common-size
financial statements. Common-size balance sheets and income
statements can be more easily compared, whether across the
years for a single company or across different company’s
financial statement item that is used as a base value. For
example in the income statement, 100% is assigned to net sales
with all revenue and expense accounts related to it. Under
vertical analysis, the statements showing the percentages are
referred to as Common Size Financial Statements. In the
balance sheet, the total assets equal 100%. Each asset is stated
as a percentage of total assets. Similarly, total liabilities and
stockholders' equity are assigned 100% with a given liability or
equity account stated as a percentage of the total liabilities and
stockholders' equity.
 Profit and Loss Account Meezan Bank Limited
2007 2008 2009 2007 2008 2009

Description Rs.In ,000 Vertical Analysis

Profit / return earned on
financings, investments and
placements 4,573,752 6,803,213 10,102,060 100 100 100
Return on deposits and other
dues expensed 2,451,968 3,088,334 4,969,916 53.6 45.4 49.2
Net spread earned 2,121,784 3,714,879 5,132,144 46 55 51
Provision against non-
performing financings (net) 435,018 428,436 1,430,536 9.5 6.3 14.2
Provision for diminution in
value of investments and
impairment 878 288,884 88,640 0.02 4.2 0.9
Bad debts written off directly - - - - - -
  435,896 717,320 1,519,176 9.5 10.5 15.0
Net spread after provisions 1,685,888 2,997,559 3,612,968 36.9 44.1 35.8
OTHER INCOME            
Fee, commission and brokerage
income 321,685 431,725 529,260 7.03 6.35 5.24
Dividend income 104,345 243,585 189,973 2.28 3.58 1.88
Income from dealing in foreign
currencies 392,319 304,692 752,904 8.58 4.48 7.45
Capital gain / (loss) on sale of
investments - net 533,093 47,001 76,160 11.66 0.69 0.75
Unrealised loss on held for
trading investments (31,453) (23,014) - (0.69) (0.34) -
Impairment on
reclassification of securities
from held for trading to
available for sale securities - (362,751) - - (5.33) -
Other income 27,904 66,670 49,507 0.61 0.98 0.49
Total other income 1,347,893 707,908 1,597,804 29.47 10.41 15.82
  3,033,781 3,705,467 5,210,772 66.3 54.5 51.6
OTHER EXPENSES            
Administrative expenses 1,755,761 2,626,606 3,530,161 38.39 38.61 34.94
Other provisions / write
offs 5,948 86,263 (60,859) 0.13 1.27 (0.60)
Other charges 2,884 287 1,747 0.06 0.00 0.02
Total other expenses 1,764,593 2,713,156 3,471,049 38.58 39.88 34.36
  1,269,188 992,311 1,739,723 27.75 14.59 17.22
Extraordinary / unusual
items - - -      
PROFIT BEFORE
TAXATION 1,269,188 992,311 1,739,723 27.75 14.59 17.22
Taxation - Current 271,452 314,790 1,440,374 5.93 4.63 14.26
Prior years - - - - - -
Deferred 34,235 56,334 (726,002) 0.75 0.83 (7.19)
  305,687 371,124 714,372 6.68 5.46 7.07
PROFIT AFTER
TAXATION 963,501 621,187 1,025,351 21.07 9.13 10.15
Unappropriated profit
brought forward 448,427 1,219,228 570,114 9.80 17.92 5.64
Profit before appropriations 1,411,928 1,840,415 1,595,465 30.87 27.05 15.79
 Balance Sheet Meezan Bank Limited
Description 2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000 Vertical Analysis

Cash and balances with
treasury banks 5,644,028 5,763,710 8,387,432 8.40 6.76 6.75
Balances with other banks 3,729,549 1,344,974 5,260,467 5.55 1.58 4.24
Due from financial
institutions 8,850,000 18,108,000 34,499,500 13.17 21.23 27.78
Investments 10,535,186 14,286,949 23,290,309 15.68 16.75 18.76
Financings 34,576,339 39,768,481 44,188,066 51.47 46.63 35.58
Operating fixed assets 1,032,963 1,880,515 2,416,375 1.54 2.21 1.95
Deferred tax asset - - 204,172 - - 0.16
Other assets 2,810,494 4,123,441 5,935,413 4.18 4.84 4.78
  67,178,559 85,276,070 124,181,734 100 100 100
LIABILITIES
Bills payable 1,192,160 1,057,017 1,249,210 1.8 1.2 1.0
Due to financial
institutions 2,415,606 4,008,496 8,468,425 3.6 4.7 6.8
Deposits and other
accounts 54,582,353 70,233,875 100,333,051 81.2 82.4 80.8
Sub-ordinated loan - - - - - -
Liabilities against assets
subject to finance leases - - - - - -
Deferred tax liabilities 430,377 453,038 - 0.6 0.5 -
Other liabilities 2,851,407 3,548,666 4,946,589 4.2 4.2 4.0
  61,471,903 79,301,092 114,997,275 91.5 93.0 92.6
  67,178,559 85,276,070 124,181,734 100.0 100.0 100.0

REPRESENTED BY            

Share capital 3,779,897 4,925,961 6,650,048 5.6 5.8 5.4

Reserves 720,785 845,022 1,050,092 1.1 1.0 0.8

Inappropriate profit 1,219,228 570,114 1,390,395 1.8 0.7 1.1

  5,719,910 6,341,097 9,090,535 8.5 7.4 7.3

Deficit on revaluation of
investments (13,254) (366,119) 93,924 (0.0) (0.4) 0.1

NET ASSETS 5,706,656 5,974,978 9,184,459 8.5 7.0 7.4

 Balance Sheet Faysal Bank Limited
Description 2007 2008 2009 2007 2008 2009

ASSETS Rs.In ,000 Vertical Analysis

Cash and balances with
treasury banks 6,872,032 8,927,524 8,427,202 4.9 6.5 4.7
Balances with other banks 3,708,451 876,780 508,795 2.6 0.6 0.3
Lending's to financial
institutions 7,078,102 2,861,401 15,017,826 5.0 2.1 8.3
Investments 31,553,108 30,186,168 56,531,338 22.3 21.8 31.3
Advances 87,346,401 89,758,789 91,346,001 61.8 64.9 50.5
Operating fixed assets 2,514,959 2,646,978 2,787,617 1.8 1.9 1.5
Deferred tax assets - net - - 1,279,918 - - 0.7
Other assets 2,204,368 2,983,846 4,966,716 1.6 2.2 2.7
  141,277,421 138,241,486 180,865,413 100 100 100
LIABILITIES            
Bills payable 2,406,927 1,536,517 1,465,451 1.7 1.1 0.8
Borrowings from financial
institutions 9,995,855 13,027,468 34,985,766 7.1 9.4 19.3
Deposits and other accounts 102,067,422 102,776,793 123,655,188 72.2 74.3 68.4
Sub-ordinated loans 1,000,000 999,600 999,200 0.7 0.7 0.6
Liabilities against assets subject
to finance lease 7,827 4,103 - 0.0 0.0 -
Deferred tax liabilities - net 2,691,466 2,483,355 - 1.9 1.8 -
Other liabilities 6,951,421 6,641,542 6,977,069 4.9 4.8 3.9
  125,120,918 127,469,378 168,082,674 88.56 92.21 92.93
  16,156,503 10,772,108 12,782,739 11.4 7.8 7.1
REPRESENTED BY            

Share capital 5,296,445 5,296,445 6,090,911 3.7 3.8 3.4

Reserves 3,567,033 3,790,023 4,030,056 2.5 2.7 2.2

Unappropriated profit 1,481,668 1,049,519 1,215,179 1.0 0.8 0.7

  10,345,146 10,135,987 11,336,146 7 7.33 6.27

Surplus on revaluation of assets 5,811,357 636,121 1,446,593 4.1 0.5 0.8

  16,156,503 10,772,108 12,782,739 11.4 7.8 7.1

 Profit and Loss Account Faysal Bank Limited
Description 2007 2008 2009 2007 2008 2009
  Rs.In ,000 Vertical Analysis
Mark-up / return / interest
earned 11,610,781 13,404,132 16,957,875 100.0 100.0 100.0
Mark-up / return / interest
expensed 7,459,392 8,454,755 11,967,885 64.2 63.1 70.6
Net mark-up / interest income 4,151,389 4,949,377 4,989,990 35.8 36.9 29.4
Provision against non-
performing loans and advances 1,797,432 1,561,016 1,966,414 15.48 11.65 11.60
(Reversal) / Provision for
consumer loans - general 74,537 (104,822) (26,723) 0.6 (1) (0.2)
Provision for diminution in the
value of investments Bad debts
written off directly 207,075 591,168 252,192 1.8 4.4 1.5
  - - - 17.91 15.27 12.93
Net mark-up / interest income
after provisions 2,079,044 2,047,362 2,191,883 17.8 21.7 16.5
  2,072,345 2,902,015 2,798,107
Non mark-up / interest income
Fee, commission and brokerage
income 743,913 814,001 885,124 6 6.07 5.22
Dividend income 1,221,217 1,207,366 667,926 11 9.01 3.94
Income from dealing in foreign
currencies 313,597 347,114 400,477 3 2.59 2.36
(Loss) / Gain on sale of securities 1,115,613 (133,881) 824,621 10 (1.00) 4.86
Unrealized (loss) / gain on
revaluation of investments
classified as held for trading 2,984 (3,410) (45,674) 0 (0.03) (0.27)
Other income 43,821 79,403 80,591 0 0.59 0.48
Total non mark-up / interest
income 3,441,145 2,310,593 2,813,065 29.6 17.2 16.6
 
Non mark-up / interest expenses 5,513,490 5,212,608 5,611,172 47.49 38.89 33.09
Administrative expenses 2,799,747 3,257,843 4,284,086 24.1 24.3 25.3

Other provisions 6,061 96,864 (6,444) 0.1 0.7 (0.0)

Other charges 9,855 61,364 33,029 0.1 0.5 0.2
Total non mark-up / interest expenses 2,815,663 3,416,071 4,310,671 24.3 25.5 25.4
Extraordinary items / unusual items - - - - - -
Profit before taxation 2,697,827 1,796,537 1,300,501 23.2 13.4 7.7
Taxation - Current 282,381 155,956 1,157,443 2.4 1.2 6.8

Prior years (48,433) 100,000 2,823,492 (0.4) 0.7 16.7

Deferred 191,771 425,629 (3,880,593) 1.7 3.2 (22.9)

  425,719 681,585 100,342 3.7 5.1 0.6
Profit after taxation 2,272,108 1,114,952 1,200,159 19.57 8.32 7.08
 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.
• There are several ratios which use in above but there trends
are given below:
 Trend analysis
Faysal Bank limited
For the years 2007, 2008 & 2009
Performance Area 2007 2008 2009 Trend
a) Liquidity Ratios        
Current Ratio This ratio is lower in 2009 as
2.36 2.06 1.64 compare to 2007 & 2008
Sales to Working Capital Working Capital is gradually
0.15 0.19 0.25 improving 
Working Capital Lower liquidity in 2009 as
79,885,142 69,830,925 68,788,799 compare to 2007
b) Leverage Ratios        
Time Interest Earned TIE Ratio lower down each
1.36 1.21 1.11 year
Fixed Charges Coverage Fix Charges coverage Ratio
1.36 1.21 1.11 lower down 2009
Debt Ratio Debt Ratio improving and
0.89 0.92 0.93 highest in 2009
Debt to Equity Debt to Equity Ratio Highest
7.74 11.83 13.15 in 2009
Current Worth / Net worth 4.94 6.48 5.38 Lowest in 2009
Total Capitalization Ratio 0.8 0.85 0.82 Slightly changed
Fixed Asset to Equity 0.02 0.021 0.024 Highest in 2009
Long term Assets to Long term  Improving each year and
Debt 0.04 0.04 0.07 highest in 2009
Debt Coverage Ratio 0.08 0.08 0.08 Stable though out years 
c) Profitability Ratios        
DuPont Return on Assets Highest 2007 and lowest
1.61 0.81 0.66 2009
Operating Income 87.48 76.48 78.24 Good ratio highest in 2007
Operating Assets Turn Over 112.79 92.89 69.13 Lowest in 2009
Return on Operating Assets 17.35 8.95 10.24 Lowest in 2009
Sales to Fixed Assets 4.62 5.06 4.17 Higher in 2009  
Return on Total Equity Lower down each year &
14.06 10.35 9.39 lowest in 2009 
Net Profit Margin Lower in 2008 & lowest in
19.57 8.32 7.08 2009 
d) Activity Ratios:        
Total Asset Turnover 0.08 0.10 0.09 Higher efficiency since 2008
e) Market Ratios:        
Dividend per Share. 1.34 1.43 0.00 Dividend not paid 2009
Earning per Share. 4.29 1.83 1.97 Higher In 2007
Price/ Earning Ratio. 15.37 3.44 4.52 Lower in 2008
Dividend Payout Ratio 0.31 0.78 0.00 Dividend not paid 2009
Dividend Yield Ratio 1.34 1.43 0.00 Dividend not paid 2009
Book Value Per Share. 3.05 2.03 2.10 Highest in 2007
f) Statement of cash flow        
Operating Cash flow/ Total Debt 0.06 0.01 0.08 Lower in 2008
Operating Cash Flow per Share 13.75 3.13 22.95 Increased during 2009
 Trend analysis
Meezan Bank Limited
For the years 2007, 2008 & 2009
Performance Area 2007 2008 2009 Trend
a) Liquidity Ratios        
Current Ratio Highest in 2007
1.79 1.61 1.56
Sales to Working Capital Improved gradually and
0.16 0.22 0.23 higher in 2008 & 2009
Working Capital Highest in 2009 and higher
29,178,59 31,551,32 in 2008 as compare to 2007
4 7 43,862,129
b) Leverage Ratios        
Time Interest Earned 1.52 1.32 1.35 Highest in 2007
Fixed Charges Coverage Highest in 2007 But
sufficient and maintained in
1.52 1.32 1.35 2008 & 2009
Debt Ratio 0.92 0.93 0.93 Stables through out years
Debt to Equity 10.77 13.27 12.52 Higher in 2008
Current Worth / Net worth 5.11 5.28 4.78 Lower during 2009
Total Capitalization Ratio Lower in 2007 & highest in
0.31 0.69 0.43 2008
Fixed Asset to Equity Highest in 2008 & higher in
0.017 0.024 0.023 2009
Long term Assets to Long term Higher in 2007 & 2009 
Debt 0.4 0.14 0.37
Debt Coverage Ratio 0.06 0.05 0.06 Almost Stable in three years 
c) Profitability Ratios        
DuPont Return on Assets 1.43 0.73 0.83 Lower during 2008
Operating Income 81.36 59.98 66.42 Lower efficiency since 2008
Operating Assets Turn Over 227.53 132.13 159.02 Highest efficiency in 2007
Return on Operating Assets Gradually decreased and
9.26 6.91 6.38 lowest in 2009
Sales to Fixed Assets Higher in 2007 & lowest in
4.43 3.62 3.85 2008 
Return on Total Equity  Lower down in 2008 but
16.84 9.80 11.28 improved in 2009
Net Profit Margin 21.07 9.13 10.15 Lowest in 2008 
d) Activity Ratios:        
Total Asset Turnover 0.07 0.09 0.09 Higher in 2008 & 2009
e) Market Ratios:        
Dividend per Share. 1.25 4.48 2.88 Highest in 2008
Earning per Share. 1.96 1.22 1.71 Higher In 2007
Price/ Earning Ratio. Lower in 2009 & highest in
15.12 17.60 9.20 2008
Dividend Payout Ratio 0.64 3.67 1.68 Good market perceptions
Dividend Yield Ratio Lower in 2007 & highest in
1.25 4.48 2.88 2008
Book Value Per Share. 1.51 1.29 1.37 Good market perceptions
f) Statement of cash flow        
Operating Cash flow/ Total Lower in 2008
Debt 0.12 0.04 0.12
Operating Cash Flow per Share Highest in 2009 & lowest in
 Industry Averages and
Comparisons with Competitors
• If we analyze of financial sectors we can say the banking system of Pakistan is
quite better. The banks are playing important role for the economic
development in Pakistan. By utilizing the information technology banks are
offering valuable & quick services to customers. The information technology
bring revolutionary changing in banking sectors internet banking mobile
banking online fund transfers etc. are the part of these positive changes.
Especially the in private sectors banks provide a lot awareness to its customers.
The financial experts of banks also provide consultancy to its valuable
customer to maintain the long term relations with customers & take the
competitive advantages. Here I will graphically analyze eight average ratios of
three year of Allied Bank Limited, Bank Al-Falah Limited & Bank Islami,
Which I narrate at the start in the list of competitors.
Three Years Average Current Ratio
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Current Ratio of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Current Assets 150,384,949 90,367,446 357,452,752 342,256,053 20,573,626

Current Liabilities 77,549,994 55,503,429 241,226,239 218,340,341 9,238,167

Current Ratio 1.94 1.63 1.48 1.57 2.23

Ave rage Curre nt Ratio of 2007-2008 & 2009

2.50 2.23
1.94
2.00 FBL
1.63 1.57
1.48 MBL
R a t io

1.50
ABL
1.00
BA FL
0.50 BIPL
0.00
1
Three Years Average Working Capital
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Working Capital of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Current Assets 150,384,949 90,367,446 357,452,752 342,256,053 20,573,626

Current Liabilities 77,549,994 55,503,429 241,226,239 218,340,341 9,238,167

Working Capital 72834955.33 34864016.67 116226513.7 123915712 11335458.33

Ave rage Work ing Capital Ratio of 2007-2008 & 2009

140000000.00
120000000.00 FBL
100000000.00 MBL
Ratio

80000000.00
ABL
60000000.00
40000000.00 BAFL
20000000.00 BIPL
0.00
1
Three Years Average Sales To Working
Capital of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Sales To Working Capital of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Working Capital 72,834,955 34,864,017 116,226,514 123,915,712 11,335,458

Sales To Working
Capital 0.19 0.21 0.27 0.25 0.13

Ave r age Sale s To Work ing Capital Ratio of 2007-2008 &

2009

0.30 0.27
0.25
FBL
0.25 0.21
0.19
0.20 MBL
R a t io

0.13
0.15 A BL
0.10 BA FL
0.05
BIPL
0.00
1
 Three Years Average Debt Ratio
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Debt Ratio of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Total Debt 140,224,323 85,256,757 344,323,471 337,185,989 18,015,335

Total Assets 153,461,440 92,212,121 364,244,325 355,651,990 22,607,615

Debt Ratio 0.91 0.92 0.95 0.95 0.8

Ave r age De bt Ratio of 2007-2008 & 2009

1.00
0.95 0.95
0.95 0.91 0.92 FBL
0.90 MBL
R a t io

0.85 0.80 A BL
0.80 BA FL
0.75 BIPL
0.70
1
Three Years Average Current To Net Worth
Ratio of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Current To Net Worth Ratio of FBL, MBL, ABL, BAFL &
BIPL

Particulars FBL MBL ABL BAFL BIPL

Current Worth 72,834,955 34,864,017 116,226,514 123,915,712 11,335,458

Net Worth 13,237,117 6,955,364 19,920,854 18,466,001 4,592,280

Current To Net Worth Ratio 5.5 5.01 5.83 6.71 2.47

Ave r age Cur r e nt To Ne t Wor th Ratio of 2007-2008 & 2009

8.00 6.71
5.50 5.83 FBL
6.00 5.01
MBL
R a t io

4.00 A BL
2.47
BA FL
2.00
BIPL
0.00
1
 Three Years Average Gross Profit Ratio
of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Gross Profit Ratio of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Gross Profit 4,696,919 3,656,269 14,368,679 10,180,774 669,700

Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Gross Profit Ratio 33.57 51.07 46.4 33.09 47.11

Ave r age Gr os s Pr ofit M ar gin Ratio of 2007-2008 & 2009

60.00 51.07
46.40 47.11
50.00 FBL
33.57
R a t io

40.00 33.09 MBL

30.00 A BL
20.00 BA FL
10.00 BIPL
0.00
1
 Three Years Average DuPont Return On
Assets Ratio of FBL, MBL, ABL, BAFL & BIPL
Three Years Average DuPont Return On Assets Ratio of FBL, MBL, ABL, BAFL
& BIPL

Particulars FBL MBL ABL BAFL BIPL

Profit After Tax 1,529,073 870,013 5,628,883 1,776,188 -297,508

Total Assets 153,461,440 92,212,121 364,244,325 355,651,990 22,607,615

DuPont Return On Assets 1 0.94 1.55 0.5 -1.3

Ave r age DuPont Re tur n On As s e ts Ratio of 2007-2008 &

2009

2.00 1.55
1.00 0.94 FBL
1.00 0.50
MBL
R a t io

0.00 A BL
1 BA FL
-1.00
BIPL
-1.30
-2.00
 Three Years Average Net Profit Margin
Ratio of FBL, MBL, ABL, BAFL & BIPL
Three Years Average Net Profit Margin Ratio of FBL, MBL, ABL, BAFL & BIPL

Particulars FBL MBL ABL BAFL BIPL

Net Profit 1,529,073 870,013 5,628,883 1,776,188 -297,508

Sales 13,990,929 7,159,675 30,964,488 30,770,607 1,421,546

Net Profit Margin 10.93 12.15 18.18 5.77 -20.9

Ave r age Ne t Pr ofit M ar gin Ratio of 2007-2008 & 2009

30.00
18.18
20.00 12.15 FBL
10.93
10.00 5.77
MBL
R a t io

0.00 A BL
-10.00 1 BA FL

-20.00 BIPL
-20.90
-30.00
 Conclusion/Findings
• Liquidity position of Faysal Bank Limited is higher then
Meezan Bank Limited this indicates that Meezan Bank
Limited has higher leverage. Both financial institutes should
improve their current ratio & working capital position in
financial year 2009. The analysis shows that its lower down
gradually.
• Net profit margin of Meezan Bank Limited is higher then
Faysal Bank Limited.
• Gross profit margin of Meezan Bank Limited is higher then
Faysal Bank Limited so I would like to suggest Faysal Bank
should improve its Gross Profit margin to meet the expenses
efficiently and set a sight profit for shares holders.
 Conclusion/Findings
 The Operating income margin of Faysal Bank Limited is higher
then Meezan Bank Limited which indicates that Faysal Bank
Limited generates higher income by its own operation as compare
to Meezan Bank Limited.
 The Long Term debt to long term liabilities ratio of Meezan Bank
Limited is higher then Faysal Bank Limited because Faysal bank
limited employed its funds in short term activities more then
Meezan Bank Limited
 Meezan Bank Limited has a good market perception due to
continuous declaration of dividends but on the other hand Faysal
Bank limited did not declared dividend in financial year 2009.
 The three years average price / earning ratio of Meezan Bank
Limited 13.97 while the Faysal Bank Limited has 7.78 % this
indicates the Meezan Bank Limited has much potential in stock as
compare to Faysal Bank Limited.
 The operating cash flow to total debt ratio of Meezan
Bank Limited is little higher then Faysal Bank Limited
 Recommendations
With the assistance analyses of financial reports I would like to
recommend both financial institutes should over come their pit
falls, flaws and deficiencies. Meezan Bank limited should improve
its current ratio. The Meezan Bank Limited Net Profit Margin is
higher then Faysal Bank Limited. The Faysal Bank Limited should
improve its profitability ratio by efficiently use its resources.
Similarly the price earning ratio & dividend payout ratio of Meezan
Bank Limited is higher then Faysal Bank this highlights good
return on investment as well good market perception. Faysal should
also pay dividend consistently through generate the profit by
improving its operation. I would also like to recommend that
financial institute should much promote the business activities and
provide financial assistance to industry which will be reduce the un
employment, inflation and increase productivity of Pakistan
Thank You