Quiz on Analysis of Bank Performance

What is the primary focus of financial ratio analysis?

• Reducing operational costs

• Maximizing shareholder value

• Increasing market share

• Comparing financial performance

Which of the following is a type of financial ratio?

• Common size ratios

• Market share ratios

• Growth ratios

• Liquidity ratios

What does ROA stand for in financial analysis?

• Return on Assets

• Rate of Accumulation

• Return on Average

• Revenue on Assets

What is a benefit of using financial ratios?

• They provide absolute values

• They allow valid comparisons

• They eliminate all risks

• They predict future performance

What is a common issue with financial data?

• It is always accurate

• It can be distorted by creative accounting

• It is easy to interpret

• It reflects future market values

Which of the following is NOT a key question for financial analysis?

• Is the bank's marketing strategy effective?

• Is the bank achieving its long run objective?

• Are returns to shareholders high?

• Are risks low?

What does the term 'off-balance sheet transactions' refer to?

• Transactions that are not recorded on the balance sheet

• Transactions that increase liabilities

• Transactions that are recorded in cash flow statements

• Transactions that are always profitable

What is a limitation of financial ratios mentioned in the text?

• They are always forward-looking

• They can hide important details

• They are easy to calculate

• They are based on future projections

Which financial standard was introduced in 2005 that affected bank reporting?

• Generally Accepted Accounting Principles (GAAP)

• Financial Accounting Standards Board (FASB)

• International Accounting Standards (IAS)

• International Financial Accounting Standards (IFRS)

What is the average profit for the three years given in the example?

• 4

• 6

• 2

• 8