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Sunday, March 11, 2012

Re: ::: vuaskari.com ::: Banking Internees: Let's prepare for viva questions.........

Taken from Askari Files


==============================================================
Imran Ali,
MBA 4th (Finance),
"The Hardest Part About Losing Love;  IS FINDING YOUR WAY BACK".
===============================



2012/3/11 ●๋•ιмяαη αℓι●๋• <candle.in.winds@gmail.com>
here is some explanation.

 

Net Profit Margin

This ratio shows profitability of the bank against it sales. Net profit margin indicates how well the company converts sales into profits after all expenses are subtracted out. The higher the net profit margin is, the more effective the company is at converting revenue into actual profit. 



Profit after Tax / Net Sales Revenue * 100

 

 

Gross Spread Ratio

Gross spread ratio= (Net interest margin/Interest Income) *100

Spread of interest between borrowing and lending. spread between the loan rates and deposit rates.


Net interest margin= Interest earned - interest expensed

Interest Income =Markup/ Return/Interest earned



 

Non Interest Income to Total Income Ratio

Non Interest Income to Total Income measures the proportion of bank's total income which had been generated by non-interest related activities.  

Non Interest Income to Total Income = Non Interest Income / Total Income

Non-interest income  = Non mark-up/interest income

 

Spread ratio

Spread ratio = Interest Earned/Interest Expense

 

Return on Assets

ROA is measure of a company's profitability, equal to EBIT divided by its total assets, expressed as a percentage.

EBIT / Total Assets x 100

 

DuPont Return on Assets

Dupont ROA is an approach that determines the impact of asset turnover and profit margin on profits.

DuPont Return on Assets={(Net Income / Sales) x (Sales / Total Assets)}*100

 

Return on Total Equity (ROE)

Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Net income / Shareholder Equity x 100

Total Shareholder Equity = Share capital + Reserves + Unappropriated profit

 

Debt Ratio

Debt ratio used to measure a company's financial risk by determining how much of the company's assets have been financed by debt

Total Liabilities / Total assets

 

A debt ratio of greater than 1 indicates that a company has more debt than assets

A debt ratio of less than 1 indicates that a company has more assets than debt

 

Increasing Debt Ratio is favorable for the banks (But not more than 1) and not favorable for the companies.

Decreasing Debt Ratio is not favorable for the banks and favorable for the companies.

 

 

Debt / Equity Ratio

Debt to Equity ratio indicates the relationship between the external equities or outsider's funds and the internal equities or shareholder's funds. Debt/equity ratio is a measure of financial leverage of a company calculated by dividing its total liabilities by stockholders' equity.

Total Liabilities / Total Shareholder Equity

 

Ideally, the banks want to see a ratio of 2:1, which equates to a 2.0 or less. As your ratios edge above this level the loan becomes a riskier proposition for the bank, and there is a good chance that your credit application will be declined.

 

 

 

Times Interest Earned (Interest Coverage Ratio or Fixed Charged Coverage)

Time interest earned indicates whether the business has earned sufficient profits to pay its periodical interest liabilities or not

EBIT / Interest Expense

 

Increasing Ratio is favorable for the bank because it may attract the investors.

Decreasing Ratio is not favorable for the bank because company has been less able to cover the interest on the debt

 

Your banker will be looking for your TIE ratio to be 2.0 or greater, showing that your business is earning the interest charges two or more times each year

 

 

 

 Advances / Deposits Ratio

Advances/ deposit ratio is used to calculate a lending institution's ability to cover withdrawals made by its customers.

Advances / Deposits ratio = Advances / Deposits

 

 

Operating Cash Flow Ratio

Operating cash flow ratio measure how well current liabilities are covered by the cash flow generated from a company's operations.

Operating cash flow ratio = Cash flow form operating activities / Current liabilities

 

 

 

Market Ratios

Market ratios measure investor response to owning a company's stock and also the cost of issuing stock.

These Include:

 

 Dividend Per Share

Dividend per share is used to measure the income received by shareholders from each share owned.

Total Dividend / Numbers of share outstanding

 

Increasing Ratio for banks is good because it will attract more investors.

Decreasing ratio for banks is not good because the investors will not invest.

 

 

Earning Per Share

Earnings per share serve as an indicator of a company's profitability.

Net Income / Numbers of Share Outstanding

 

Increasing Ratio for banks is good because it will attract more investors.

Decreasing ratio for banks is not good because the investors will not invest.

 

 

Price/Earning Ratio

Price/Earning ratio is a valuation ratio of a company's current share price compared to its per-share earnings.

Market Value per Share / Earning per share

 

Increasing Ratio for banks is good because it will attract more investors.

Decreasing ratio for banks is not good because the investors will not invest.



==============================================================
Imran Ali,
MBA 4th (Finance),
"The Hardest Part About Losing Love;  IS FINDING YOUR WAY BACK".
===============================



On Sun, Mar 11, 2012 at 6:07 PM, jjj <j.blackberry092@gmail.com> wrote:
Anyone tell me the proper definition and benchmark rate of the following ratio for viva preparation.

1) Net Profit Margin

2) Gross Spread Ratio

3) Non Interest Income to Total Income Ratio

4) Spread Ratio

5) Return on Assets (ROA)

6) Du Pont Return on Assets Ratio

7) Return on Total Equity (ROE)

8) Debt Ratio

9) Debt / Equity Ratio

10) Times Interest Earned Ratio

11) Advances / Deposits Ratio

12) Operating Cash Flow Ratio

13) Dividend per Share

14) Earning per Share

15) Price/Earning Ratio



On Thu, Mar 8, 2012 at 1:33 AM, mc100200319 Salma Bibi <mc100200319@vu.edu.pk> wrote:
salam to all....
   Mahaa its a very good way for the prepration of viva & presentation.. My request to all seniors & those who have idea about viva plz share ur openion..

On Mon, Mar 5, 2012 at 8:42 PM, JaNNat <mc100202703@vu.edu.pk> wrote:
1- What is Next of Kin 
A: next of kin used to describe a person's closest living blood relatives at the time of account opening.i.e account holders wife/husband, mother/father, friend or any other person whose CNIC copy is provided at the time of account opening.
if the account holder does not come in bank for the 6 months or in case if he/she is died then the next of kin(whose name is mentioned,CNIC copy) can take account balance of the account holder.
2: What is Basic Banking Account (BBA) 
A; it is stands for basic banking account.
BBA account basically for the salaried persons and for students.
requirements for account opening
1: CNIC copy(see orignal)
2: salary slip in case of salaried individual and bonafide letter for students.
3:initial deposit is 1000RS.
features:
two withdrawals and cash deposits in every month are free.
with the bank debit card unlimited withdrawals and cash deposits.
no deduction of charges.
non profit bearing..

3- Difference between BBA Account and Current Account
A:
BBA  account stands for basic banking account. it is specially for salaried individuals and students. 

current account:
current account is that account where is no profit and no loss.



4- What is SS Card
A;  SS card stands for specimen signature card. after the fulfilment of all requirements for account opening there is turn of SS card.
it is used ti telly the signature at the time of cheque payment.
generally two signatures are taken of account holder on SS card.


5- what is Letter of Credit (LC)
A; LC stands for letter of credit. it is an instrument that is drawn by importers bank on exporters bank to deliver the goods on specific date and time. it is very important instrument in international trade.



6- How many Types of Clearings
A;  there are two types of clearing
1: inward clearing( where bank received cheque that is drawn on him for clearing by NIFT)
2:outward clearing( where instruments are deposited by customers drawn on other banks presented for clearing)


7:Difference B/W Inward Clearing and Outward Clearing
A:  as it is mentioned in question no 6's answer:)

MAHAA  am i rite?????










On Mon, Mar 5, 2012 at 8:18 PM, Mahaa Shah <mahaa.shah.askari@gmail.com> wrote:
plx its a request that reply to all not only reply to me
try to click reply to all so all can discuss




On Mon, Mar 5, 2012 at 2:21 AM, Mahaa Shah <mahaa.shah.askari@gmail.com> wrote:
Let's start preparing viva questions which we old students have experienced in our session.
i will ask some questions and all should answer those. Then next day, i will provide u answers...
You All Agree?

Here We Start:
Common Questions from Banking Sector on Training Program:
1- What is Next of Kin
2- What is Basic Banking Account (BBA)
3- Difference between BBA Account and Current Account

5- what is Letter of Credit (LC)
6- How many Types of Clearings
7- Difference B/W Inward Clearing and Outward Clearing


Regards:
MAHA SHAH
ADMIN GIRLS
MBA (Finance)

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--
B@bs



--
Bubbli...

--
We say, "Be one as Pakistani Nation and grow up for Pakistan's Future". Wish you all the best. Join www.vuaskari.com,
To post to this group, send email to vuaskari_com@googlegroups.com
Visit these groups:
This (Main) Group:http://groups.google.com/group/vuaskari_com?hl=en?hl=en
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--
We say, "Be one as Pakistani Nation and grow up for Pakistan's Future". Wish you all the best. Join www.vuaskari.com,
To post to this group, send email to vuaskari_com@googlegroups.com
Visit these groups:
This (Main) Group:http://groups.google.com/group/vuaskari_com?hl=en?hl=en
MIT/MCS Group: http://groups.google.com/group/vu_askarimit?hl=en?hl=en
HRM Group: http://groups.google.com/group/askari_hrm?hl=en?hl=en
Banking Group: http://groups.google.com/group/askari_banking?hl=en?hl=en
Management: https://groups.google.com/group/vuaskari_mgt?hl=en
Marketing: https://groups.google.com/group/vuaskari_mkt?hl=en
MIS Group: http://groups.google.com/group/askari_mis?hl=en
Posted by aaaa at 6:39 PM

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