Ratio Analysis:

Ratio analyses are the most popular form of analyses all over the world and the trusted one also. In ratio analyses as the name suggests ratios are used in analyzing the financial standings of the organization. We by using the ratio analyses try to find out the various ratios such as Current Ratio. Debt- Equity Ratio, Debt-Assets Ratio etc to find out the real financial standings of the company.

Liquidity Ratio: Current Ratio = Current Assets / Current Liabilities Current Ratio = 568261749/ 503187735 Current Ratio = 1.1293
This ratio is calculated to analyze that how many current assets are owned by the NBP and how much are current liabilities. Here figure of 1.1293, to pay one rupee of current liabilities, NBP has 1.293 current assets.

Turnover Ratio: Total Assets Turnover = Net Sales / Total Assets = 53824632 / 817,758,326 Total Assets Turnover = 0.0658 or 6.58%

This ratio guides the financial analysts how the resources are used efficiently, it is basically a summary of all other turn over ratios, like; inventory turn over, fixed assets turn over, so here 9.316% shows that 817,758,326 used and gain 53824632 revenue generated during the year.

Debt Ratios: Debt to Asset Ratio Debt to Assets Ratio = Total Debt / Total Assets =503,378,402 / 817,758,326 Debt to Assets Ratio = 0.6155 or 61.55%

NBP is one of the profiteer contributors in financial sector of Pakistan; here the debt to assets ratio shows that the creditors, investors, and other stakeholders interpret this ratio as implying 61 paisa of debt is backed by every one rupee of asset. So it is worthiness of the NBP to keep considerable assets to cover the debt obligations.

Equity capital to total debt ratio:

Equity capital to total debt ratio = Total Equity/Total debt Equity capital to total debt ratio =102,459,218 /503378402 Equity capital to total debt ratio = 0.2035 or 20.35%

Here the Equity capital to total debt ratio shows that the creditors, investors, and other stakeholders interpret this ratio as implying every one rupee of debt is backed by 87 paisa of share capital.

Profitability Ratios: Gross Profit Margin

Markup and non markup interest income markup and non markup expense/ Net Sales

=23311967 11456637 / 23311967 Gross Profit Margin = 0.50855 or 50.855%

NBPs profitability ratio indicates that being a financial institution, to maintain 50% gross profit margin ratio is spectacular, and the investors willingly purchase the stock.

Net Profit Margin

Net Profit Margin = Net Income / Net Sales

=21914412 / 53824632 Net Profit Margin = 0.40714 or 40.714%