COMPARATIVE FINANCIAL ANALYSIS OF BANKING SECTOR Q3 2017

KEY

ROE (Return on Equity): this is used to measure management performance, it indicates how well a company uses the capital from shareholders to generate profit. The higher the ratio, the better and suggest higher level of management performance.

ROA (Return on assets): it indicates the percentage of profit that a company earns in relation to its overall total assets.it measures the amount of profit made by a company per Naira of its assets, the higher the ratio, the better

ROTC (Return on Total Capital): it measures the profit earned using both debt and equity capital the higher the ratio, the better

RE/TA (Retain Earnings to Total Assets): it indicates the percentage of total assets that is funded by the retained earnings of the company. It is an indicator of the degree to which the company is retaining its profit and using it to finance assets instead of using debt to finance business operation, the higher the ratio, the better.

DAR (Debt to Asset Ratio): it shows the relationship between company’s liabilities and its assets. It indicates the proportion of assets that is financed by debt, the lower the ratio, the better.

OCFDR (Operating Cash flow to Debt Ratio): it is an estimate of the amount of time it would take a company to repay its debt if all cash flow is devoted. The higher the ratio in percentage term the better.

EV/EBITDA (Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation): it estimates the number of years in which the company will repay its acquisition cost to the buyer through its earnings.

DE (Debt to Equity ratio): it provides an indication of a company’s finance structure and whether the company is more reliant on borrowing (debt) or shareholders capital to fund business operation, the higher the ratio, the riskier the company.

FAIR VALUE: this is the value of the company relative to the return on 2 years FGN Savings Bond.

BVS (Book value per share): it is the difference between company’s asset and its liability.  it is a determinant of the value of a company equity relative to the market value.

PE (Price to Earnings):

P/BV (Price to Book value):

EPS (Earnings per share):

OCF/S (Operating cash flow per share):