Abstract:
Abstract:The performance of the company is required to be assessed, evaluated and
observed to gain information about what needs to be done in order to develop further.
As one of the most crucial business segment in the economy, banks, and their
performances are considered to be taken into further study.
This study attempts to classify how good the banks sampled performance. Then, by
measuring its performance through ratio analysis in the form of return on assets, net
interest margin, return on equity, capital adequacy ratio, non-performing loan,
loan-to-deposit ratio, and a market measure in form of economic value added, this
study expects to observe the influences of those measurements toward banks’ performances
in terms of total assets, total debts, and interest expense.
This research uses historical data on financial reports of the banks that compiled
over a period of 8 years (2008-2015).Authors observed that value added is created
when a company’s project yields profit, as reflected in a positive influence on PER.
They also found that there are causal relationships and the respective contribution
and magnitude of each variable that affects performance. Authors suggested that
each variable comprising, assets, earnings, capital, liquidity and sensitivity may be
analysed separately in order to gain an understanding of how each respective variable
actually contributes to performance.
