Overview
The Bank Income Statement Ratio Calculator is a tool that you can use to determine a bank's profitability, efficiency, and growth through information found on an income statement. This calculator uses several inputs such as operating expenses, net interest expenses, and net income. Using the inputs, the calculator will produce ratios that are important for the analysis of a bank's income statement. This template includes the following ratios:
• Efficiency Ratio
• Operating Leverage
• Earnings per Share
• Dividend Yield

### Efficiency Ratio

As the name suggests, the efficiency ratio is used to determine the efficiency in which the bank operates. Efficiency is measured by dividing the non-interest expense by the total revenue of the bank. The formula for the efficiency ratio is: Efficiency Ratio = Non-Interest Expense / Revenue Since the non-interest expense is in the numerator, a higher efficiency ratio suggests a more efficient bank.

### Operating Leverage

Operating leverage is another measure of efficiency for a bank. Unlike the operating leverage used for other companies, which uses contribution margin and profit, calculating this ratio for a bank uses different inputs. For a bank, this ratio compares the growth rate of non-interest expense and revenue. The formula for the operating leverage is: Operating Leverage = Growth Rate of Revenue - Growth Rate of Non-Interest Expense The operating leverage takes the difference between the two growth rates. A positive ratio means the revenue is growing faster than the non-interest expense. So, bigger operating leverage means the bank is more efficient in growing operations.

### Earnings per Share (EPS)

Earnings per share is a metric that is used in all industries. It allocates a company's net income too outstanding shares. EPS is used to compare the profitability of different companies in the same industry. The formula for EPS is: Earnings per Share = (Net Income - Preferred Dividends) / Outstanding Share A higher EPS demonstrates a company that is more profitable on a shareholder basis.

### Dividend Yield

Dividend yield measures the amount of dividend per share in relation to the share price. This gives investors an easy way of comparing different companies. The formula for dividend yield is: Dividend Yield = Dividend per Share / Share Price A higher dividend yield demonstrates a higher dividend gained on each dollar spent on purchasing a share.
Share
No reviews yet

## More From Corporate Finance Institute®

Browse our top rated business templates. See All
Restructuring Financial Model Template
209
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template
320
0
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…
Bank Financial Model Template
301
0
This bank financial model template is used to value financial institutions group (FIG) companies. This is a comprehensive model that…
Option Profit/Loss Graph Maker
901
239
This free Option Profit/Loss Graph Maker allows the user to combine up to ten different types of options as well…