Question

number 17 please help

17. Take the Balance Sheets and Income statements of Mlimani Bank Limited for three years as shown below, for each year compute: A. ROE B. ROA C. Asset Utilization D. Equity Multiplier E. Net interest margin F. Security gain to Asset G. Taxes to Assets H. Net Non-Interest Expenses to Earning Assets I Loan Loss Provision to Earning Assets J. Non Earning Assets to Assets 2013 59,000 27,000 3,000 (6,000) 8,000 15,000 Income statements for Year 2014 (Amounts in Mil TZS) Net Interest Income 83,000 67,000 Net Non-Interest Expenses 42,000 37,000 Loan Loss Provision 6,000 2,000 Security Gains (5,000 0 Taxes 10,000 9,000 Net Income 20,000 19,000 Balance Sheets (Year End) Cash 150,000 260,000 Securities 600,000 600,000 Loans 1,200,000 1,000,000 Building 40,000 30,000 Other Assets 10,000 10,000 Total Assets 2,000,000 1,900,000 On the basis of the calculated ratio, comment on the firms performance 410,000 550,000 950,000 30,000 10,000 1,950,000 Page 2

Answer 1

Assumptions:

1. Shareholders equity is total assets less total liabilities. In the given question, total assets are treated as shareholders equity.

2. Assets at the beginning are not given so taken at zero.

3. Interest received is taken while due to lack of information interest paid is not taken.

Table whowing sompualatons: D015 Formula 2014 Pascheubu 2013 15 000 20,000 11000 RoE (Retin on Equity) 2000, 000 Shasahelda's Euity 1950,000 ।१००,००० 1-00 /- 20,000 19000 ROA 15000 Net Incene hyenage X100 ro0 1o00 DD0 950000 (Relum on AssitL) Tetal Valua asils 97500 = 2%. - 1.530 Auudi Asset Unlization at o+200g00 O+1900,0OD o+ 1950,000 the De Bayindy end 9ㅋ5000 = 950,000 1000,000 2. Total Auite 1950,000 Equity Multiplir 1१০०,০০০ 2000,00D Total charaholde ।१००,००७ ।१००००० 2000, 00 Equity Lnterast Irdered Received 67000 - o 59000 - 0- 93000 - 0 Net Interust Paid 950,000 1000,000 975000 Maugin Avorage Irwerted 0. 059 0.04052 = 0.085 -Aaseli Seewity Gpin (6000) (5,000) Scwrily gain १৭০०,০০0 1950,000 2000,000 Tatal Assds to Asut =0.002544 2 - 0. 003

"To to 9000 10,000 Total Aaach 2০০৭০০০ 1900,000 1950,000 O. 005 D 00410 Net Ner Nel Nen Intrst Esprin 42,000 Tntexat 34,00 27,000 Cspenis to faniy 1950, 000 1960, 000 7,10, 000 favuning Naseti Msst Oe 02153 O.01989 EDO1413 deom Lou Loon dost Brouliion 3o00 2000 6 000 Prooiibu 19 50,000 17,10,000 1860, 000 to fauning Eauning O403046 - Oo015 Assela Nen-Eauning Assete Nen- 50,000 40,000 |१००,००० 40,000 195,000 Eauhing 2000,000 Asal to Tetal selh O.025 O. 02105 Asset Conmente : O RoE of Uhe t bank should be between 15-20%. The given ROE is below good foE. 2) ROA should be approx 5%, Du Ron in the giwen question is not good