The Bank Mixed Statement Ratio Calculator is a tool that you can use to determine a bank's profitability and financial strength using items found on an income statement and balance sheet. This calculator template uses several inputs such as the provision of credit losses, common equity, and net loans. This template includes the following ratios:
  • Return on Assets (ROA) Ratio
  • Return on Equity (ROE) Ratio
  • Provision for Credit Losses (PCL) Ratio
  • Net Interest Margin (NIM) - Assets

Return on Assets (ROA) Ratio

The return on assets ratio shows the profit of a bank as a percentage of the assets used to generate the profit. This allows investors to compare the profitability of one company to another in the same industry. The formula for the return on assets ratio is: Return on Assets = Net Income / End of Period Assets

Return on Equity (ROE) Ratio

The return on equity ratio is similar to ROA as both expresses the profit of a bank as a percentage. However, the ROE divides net income by equity rather than assets. The ROE also allows investors to compare a bank's profitability to the industry average or other companies. This ratio demonstrates how well a company utilizes its equity to generate profits. The formula for the return on equity ratio is: Return on Equity = Net Income / Shareholders' Equity

Provision for Credit Losses (PCL) Ratio

The provision for credit losses ratio is commonly used to evaluate the provision as a percentage of a bank's loan book. Provision is the amount of capital a bank sets aside to cover loans that have a lower chance of being recovered. A consistently high PCL ratio suggests the bank has a tendency to give risky loans. The formula for provision for credit losses ratio is: Provision for Credit Losses Ratio =  Provision for Credit Losses / Net Loans and Acceptances

Net Interest Margin (NIM) - Assets

This ratio represents net interest income as a percentage of total assets. This is a profitability ratio that only accounts for interest income generated through assets. The formula for net interest margin is: Net Interest Margin = (Interest Income - Interest Expense) / Total Assets
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