Financial Performance Analysis of Social Islami Bank Limited

Abstract

I conducted an analysis of the financial performance of Social Islami Bank Limited using the method of ratio analysis. The main data was obtained from SIBL's annual financial report for the years 2017-2021. The proportion examination has been completed, focusing on five essential measurements of banking activities: liquidity, profitability, efficiency, solvency, and market aspect. Productivity proportions assess the overall efficiency and performance of banks. Through our investigation, we have determined that the return on equity ratio is a valuable metric for analyzing the performance of SIBL. Management plays a crucial role in generating value for investors by effectively utilizing resources. The earnings per ratio indicates that there is market confidence in the future improvement of SIBL. I have found that the overall productivity of SIBL is satisfactory. The investigation on dissolvability reveals that SIBL has a greater level of influence. We understand that SIBL is using too much debt to finance compared to its shareholders' equity. This goes against the principle of maintaining a balanced proportion between debt and equity. The dissolvability of SIBL is not considered acceptable. Based on the price earnings ratio, it can be observed that the cost-profit proportion of SIBL has consistently increased over the long term. It is evident that the market has a positive outlook on SIBL's future performance. After analyzing the total asset turnover ratio and inventory turnover ratio, it was found that SIBL is effectively managing its internal assets and liabilities. The liquidity ratio indicates the speed at which SIBL can convert its assets into cash. It is evident that the liquidity state of SIBL is excellent. We acknowledge that SIBL will have the ability to generate sufficient current resources to meet its current liabilities in the future.