Using balance sheet and income statement data, create a bank analysis and performance report for your supervisor that addresses the following issues:
Using the balance sheet for each year,
Create a balance sheet showing all assets as a percentage of total assets and all liabilities as a percentage of total liabilities. Which assets on your bank's balance sheet increased over the last three years? Which assets on your bank's balance sheet declined over the last three years?
Examine the liquidity management practices of your bank over the last three years. How has the liquidity position of the bank changed over time? How does the liquidity position of your bank compare to the regional banks in year 3? Would your bank have sufficient reserves if deposits increased 40% in year 3? (Assume that the reserve requirement is 8% on all deposits.)
Calculate the equity multiplier ratio for each year. How has the equity multiplier of your bank changed over time? How does the equity multiplier of your bank compare to the regional banks in year 3?
Using the income statement for each year,
Create an income statement with operating income items expressed as a percentage of total operating income. Which items improved over the last three years? Which trends need to be reversed? How does your bank compare to the regional banks?
Create an income statement with operating expenses expressed as a percentage of total operating expenses. Which items improved over the last three years? Which trends need to be reversed? How does your bank compare to the regional banks?
Analyze the performance of the bank for each year.
Calculate the return on assets (ROA) for each year. How has the ROA trend changed over the last three years? How does your bank compare to the regional banks?
Calculate the return on equity (ROE) for each year. How has the ROE trend changed over the last three years? How does your bank compare to the regional banks?
Identify the strengths and weaknesses of your bank relative to trends over time and in year 3 for all regional banks. What is the relationship between your bank's trends and the year 3 comparison with the region?