Financial ratios atomic number 18 highly useful indicators of a firms performance and financial situation. (Financial Ratios, 2007) They argon often used to overhaul analyze tr rests deep down and persistence and to suspensor equality a firm amongst others. Ratios are highly crucial profit tools that help to implement plans that advance profitability, liquidity, financial structure, re put ining, leverage, and interest coverage. (Bernstein & Wild, 2000) Ratios are often able to help predict performance as well as tolerate indications of many potential problems.
There are several issues to sum up when comparing the financial ratios of a public company to the industry averages. It is master(prenominal) to allow for any material differences in story policies between the specific company and the industry norms. It is also important to do whether ratios were calculated before or after adjustments were make to the balance sheet or income statement. (Atrill & McLaney, 1997) It is also extremely important that one make sure that the financial data was positive using comparable accounting methods, classification procedures, and valuation bases.
I sustain chosen to analyze Branch Banking & Trusts financial ratios and compare them to industry averages.
It is extremely important to analyze the financial statements of a banking institution. Financial ratios for banks are analyzed in order to determine a banks unique risks. There are many different classifications of financial ratios. They are classified harmonize to the information that they provide. Some of the most common types of ratios and the ratios that I have chose to compare, include predictor ratios, profitability ratios, and capital ratios.
Predictor ratios help predict a companys probability of failure. 1 of the most common predictor ratios is the Altman Z-score. The Altman Z-score combines a set of 5 financial ratios According to BB&Ts 2007 year end financial statements, their Altman...If you want to get a full essay, order it on our website: Orderessay
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