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Tax and Profit Margin Analysis 2013-2014

The document discusses two key financial ratios for evaluating BLOM BANK's performance between 2014 and 2013: the tax ratio and profit margin. The tax ratio remained the same at 0.31% for both years, having no impact on return on assets. However, the profit margin decreased from 22% in 2013 to 21% in 2014, indicating worse cost control despite lower total expenses, which likely contributed to the decreases in return on assets and return on equity in 2014 compared to 2013. Additional ratios were also calculated that were consistent with the decreases in return on assets and return on equity from 2013 to 2014.

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5 views1 page

Tax and Profit Margin Analysis 2013-2014

The document discusses two key financial ratios for evaluating BLOM BANK's performance between 2014 and 2013: the tax ratio and profit margin. The tax ratio remained the same at 0.31% for both years, having no impact on return on assets. However, the profit margin decreased from 22% in 2013 to 21% in 2014, indicating worse cost control despite lower total expenses, which likely contributed to the decreases in return on assets and return on equity in 2014 compared to 2013. Additional ratios were also calculated that were consistent with the decreases in return on assets and return on equity from 2013 to 2014.

Uploaded by

Joele sh
Copyright
© All Rights Reserved
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I.

TAX RATIO:

2014 2013 Tax ratio

128,796- 123,045- income tax expense

0.31%- 0.31%- income tax expense/TA

Table 23: tax ratio

No change in the tax ratio which means it has no impact on ROA.

II. PROFIT MARGIN:

2014 2013  

21% 22% profit margin= Net income/TR=(TR-TE-

Taxes)/TR

Table 24: profit margin

In the above table, we noticed that the profit margin decreased from 2013 to 2014. PM is

a measure of cost control. Although in 2014 the total expense ratio decreased but the

company weren’t able to control it. This probably pushed the ROA to be lower in 2014

and consequently ROE.

Moreover, more ratios were calculated in order to evaluate BLOM BANK

performance such as net interest margin, non interest margin, net operating margin,

burden margin, efficiency ratio and spread. All these ratios were consistent with the

decrease of ROA and then the decrease of ROE in 2014.

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