MGT411 Assignment No 02 Fall 2020 Solution / Discussion Due Date: 02-02-2021

MONEY & BANKING (MGT411)
ASSIGNMENT NO. 02

DUE DATE: 2ND FEBRUARY, 2021                                           Mark. 10

Learning Objective
The students are expected to develop an understanding of banks’ assets and liabilities and key measures of bank return.

Learning Outcomes
After going through this activity, the students would be able to understand banks balance sheet, how to calculate key performance measures of bank through ratios.

Assignment (Question: (10 marks)


On the basis of following information extracted from the balance sheet of a Bank; you are required to calculate:
 Net Profit after tax
 Return on Equity (ROE) ratio
 Leverage ratio
 Debt to Equity ratio
 Advances to Deposits ratio

Bank Balance Sheet (In thousands)
Assets
Securities 150

Loans 500

Reserves 100

Liabilities

Deposits 430

Borrowings 200

Capital 120

Additional Information:

Return on Assets (ROA) ratio of the bank 4%.

It is compulsory to provide solution with complete working and formula.

OTHER IMPORTANT INSTRUCTIONS:

 Make sure to upload the solution file before the due date on VULMS.
 Any submission made via email after the due date will not be accepted.

FORMATTING GUIDELINES:

Use the font style “Times New Roman” or “Arial” and font size “12”.
 It is advised to compose your document in MS-Word format.
 You may also compose your assignment in Open Office format.
 Use black and blue font colors only.

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