WELCOME TO THE

PRESENTATION

Group Members

1)Mohammad Wahidul Haque• 111-11-19062)Chinmay Roy• 111-11-19043)Md. Thowhidul Islam• 111-11-17754)Shohag Parvez• 111-11-17725)Hasna Yeasmin Sumi• 111-11-18986) Nadia Islam • 111-11-18777) Abul kalam Azad• 111-11-1770

Profitability Ratio Analysis ofIslami Bank Bangladesh Ltd.

andJamuna Bank Ltd.

Profitability Ratios

• There are many measures of profitability. As a group, these measures enable analysts to evaluate the firm’s profits with respect to a given level of sales, a certain level of assets or the owner’s investment. Without profits, a firm could not attract outside capital.

•Three frequently cited ratios of profitability that can be read directly from the common-size income statements are:

1. The Gross Profit Margin2. The Operating Profit Margin3. The Net Profit Margin

Others are: Earnings per share (EPS) Return on Total Asset (ROA)

Return on Equity

Profitability Ratio Analysis ofIslami Bank Bangladesh Ltd.

•Gross Profit MarginG.Profit Margin

2007-08 2008-09 2009-10 2010-11 2011-12

 Gross Profit  

Sales

 2197854621 

10256987534 = 0.21 X 100= 21%  

 5935982040 

21369827458 = 0.24X 100= 24%

 6969875318 

21584679280 = 0.27 X 100= 27 %

 7203574218 

22654789123 = 0.31 X 100= 31%

 8895125845 

25369741852 = 0.39 X 100= 39%

2007-08 2008-09 2009-10 2010-11 2011-120

5

10

15

20

25

30

35

40

45

Gross Profit Margin

Gross Profit Margin

Decision: The higher the gross profit margin, the better amount of money is remaining the firm has paid for its goods. The lower the gross profit margin, the less amount of money is remaining the firm has after paying for its goods.

Net Profit MarginNet Profit Margin

2007-08 2008-09 2009-10 2010-11 2011-12

  Earnings

available for common stock

holders 

Sales  

 27743111949 

10256987534 = 27%  

 31235982040 

21369827458 = 28%

 35369875318 

21584679280 = 29.50%

 42035742189 

22654789123 = 31%

 68951258456 

25369741852 = 31.65%

2007-08 2008-09 2009-10 2010-11 2011-1224%25%26%27%28%29%30%31%32%33%

Net profit margin

Net profit margin

Decision: The higher the firm’s net profit margin, the better amount of money the firm has. Again, the lower the firm’s net profit margin, the less amount of money the firm has.

Return on Asset

Return on Asset 2007-08 2008-09 2009-10 2010-11 2011-12

Earnings available for common stock holders 

Total Assets  

 47743111949 

22167444018 = 25%  

 51235982040 

21369827458 = 26.50%

 55369875318 

21584679280 = 27%

 62035742189 

22654789123 = 28%

 78951258456 

25369741852 = 30.20%

2007-08 2008-09 2009-10 2010-11 2011-120

5

10

15

20

25

30

35

Return on Asset

Return on Asset

Decision: The higher the firm’s return on total assets, the better effectiveness of management in generating profits with its available assets. The lower the firm’s return on total assets, the less effectiveness of management in generating profits with its available assets.

 

Return on Equity

Return on Equity

2007-08 2008-09 2009-10 2010-11 2011-12

Earnings available for common stock holders 

Common stock equity

 

 47743111949 

332167444018 = 28%  

 51235982040 

51369827458 = 29.50%

 55369875318 

641584679280 = 30%

 62035742189 

652654789123 = 32%

 78951258456 

685369741852 = 33.10%

2007-08 2008-09 2009-10 2010-11 2011-1225

26

27

28

29

30

31

32

33

34

Return on Equity

Return on Equity

Decision: The higher this return, the better off are the owners in terms of earning on the common stockholders investment in the firm. The lower this return, the less better off are the owners.

Earnings per share EPS 2007-08 2008-09 2009-10 2010-11 2011-12 Earnings after TaxNo.of share

 1025497621 

5090300 = 12.03  

 2565489521 

10369524 = 31.10

 3698527458 

15698456 = 45.91

 4203574218 

20568546 = 60.21 

 5895125845 

29136952 = 78.12

2007-08 2008-09 2009-10 2010-11 2011-120

10

20

30

40

50

60

70

80

EPS

EPS

Decision: The higher the EPS, the greater chance of profit of the firm. Whereas the lower EPS indicates the lower chance of profit of the firm.

Profitability ratio analysis of Jamuna Bank

Gross Profit MarginGross Profit Margin

2007-08 2008-09 2009-10 2010-11 2011-12

 Gross Profit  

Sales

 197854621 

1025698753 = 0.19 X 100= 19%  

 293598204 

2036982745 = 0.14X 100= 14%

 299987531 

3158467928 = 0.17 X 100= 17 %

 420357421 

4265489123 = 0.21 X 100= 21%

 689512584 

55369741852 = 0.39 X 100= 25%

2007-08 2008-09 2009-10 2010-11 2011-120%

5%

10%

15%

20%

25%

30%

Gross profit margin

Gross profit margin

Decision: The higher the gross profit margin, the better amount of money is remaining the firm has paid for its goods. The lower the gross profit margin, the less amount of money is remaining the firm has after paying for its goods.

Net Profit Margin

Net Profit Margin 2007-08 2008-09 2009-10 2010-11 2011-12 

Earnings available for

common stock holders

 

Sales  

 274311194 

1025698753 = 21%  

 312359820 

2036982745 = 18%

 353698753 

3158467928 = 21.50%

 403574218 

4265489123 = 27%

 689512584 

55369741852 = 30.65%

2007-08 2008-09 2009-10 2010-11 2011-120%

5%

10%

15%

20%

25%

30%

35%

Net profit margin

Net profit margin

Decision: The higher the firm’s net profit margin, the better amount of money the firm has. Again, the lower the firm’s net profit margin, the less amount of money the firm has.

Return on Asset

Return on Asset 2007-08 2008-09 2009-10 2010-11 2011-12

Earnings available for common stock holders 

Total Assets  

 274311194 

3216744401 = 15%  

 312359820 

3336982745 = 16.50%

 353698753 

3458467928 = 17%

 403574218 

3864789123 = 18.75%

 689512584 

5536974182 = 20.20%

2007-08 2008-09 2009-10 2010-11 2011-120%

5%

10%

15%

20%

25%

Return on asset

Return on asset

Decision: The higher the firm’s return on total assets, the better effectiveness of management in generating profits with its available assets. The lower the firm’s return on total assets, the less effectiveness of management in generating profits with its available assets.

Return on Equity

Return on Asset 2007-08 2008-09 2009-10 2010-11 2011-12Earnings available for common stock holders 

Common stock equity  

 274311194 

4216744401 = 16.24%  

 312359820 

3336982745 = 14.90%

 353698753 

4458467928 = 18.18%

 403574218 

5864789123 = 19.05%

 589512584 

6136974182 = 23%

2007-08 2008-09 2009-10 2010-11 2011-120.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Return on Equity

Return on Equity

Decision: The higher this return, the better off are the owners in terms of earning on the common stockholders investment in the firm. The lower this return, the less better off are the owners.

Earnings per share

EPS 2007-08 2008-09 2009-10 2010-11 2011-12 Earnings after TaxNo.of share

 225976 

40200 = 5.62  

 865489 

50150 = 17.26

 1055569 

91250 = 25.91

 25487963 

125698 = 30.21 

 39858214 

2913695 = 48.12

2007-08 2008-09 2009-10 2010-11 2011-120

5

10

15

20

25

30

35

40

45

50

EPS

EPS

Decision: The higher the EPS, the greater chance of profit of the firm. Whereas the lower EPS indicates the lower chance of profit of the firm.

Comparison Between the Islami Bank and Jamuna Bank of Profitability Ratio in the year 2011-12

Gross Profit

Margin

Net Profit Margin

Return on Asset

Return on Equity

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Islami BankJamuna Bank

EPS

2007-08 EPS

2008-09 EPS

2009-10 EPS

2010-11 EPS

2011-12 EPS

0

10

20

30

40

50

60

70

80

90

Islami BankJamuna Bank

THANK YOU !!!