Description
PURPOSE
The purpose behind this study is: (1) help you develop a strong awareness of the financial
structure of depository financial institutions; (2) further your financial analysis skills; and (3)
broaden your understanding of the risks and strengths inherent in a depository institutions in the
United States.
PROCEDURE
There will be a total of three parts to this study. You will be randomly assigned a bank. It is your
task to analyze the financial structure of each company provided. Analysis consists of an Excel
analysis. When submitted, it should contain, as a minimum, the following:
Excel Spreadsheet – 2 years of data to be obtained from SEC/Edgar and/or FDIC.gov since these
are the primary sources for financial data. In other words, don’t necessarily trust Yahoo! Finance
or MSN Money. Or, go directly to the source: SEARCH THE BANK’S WEBSITE AND LOOK FOR
ANNUAL REPORTS AND DOWNLOAD
o Calculate the Financial Institution’s:
ROE and ROA
Equity Multiplier
Profit Margin (net income/total operating income), plus these detailed sub-ratios:
interest income/total operating income,
provision for loan loss/total operating income,
non-interest expense/total operating income, and
Asset Utilization (total operating income/total assets), plus these sub-ratios:
interest income/total assets and
total income/total assets
You are free to use other ratios and analysis techniques (i.e., DuPont Analysis) but only if you feel they are
important in making a point in either your analysis or conclusions. Don’t add them just to impress me; I
won’t be impressed.
SUBMIT ELECTRONICALLY TO CANVAS.
