Finance assignment

timer Asked: Apr 30th, 2020

Question Description

I solved the assignment below and I just want to add a conclusion for the assignment and if there is a mistake fix i

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1-Current ratios = Current assets/Current liabilities For 2018 Current ratios=210,102,848/159,380,476=1.32 For 2019 Current ratios=236,380,761/184,985,147=1.28 The ratio from 1-32 to 1-28. The ratio in general is good for the bank as it indicates its ability short term assets, in2019 , the value of liabilities & assets is bigger than that in 2018 as a result the ratio decreased from 2019. 2-Debt ratio= Total ratio/total asset 2018: Debt ratio =177,501,064/213,670,065=83% 2019: debt ratio=20,872,047/239,517,077=84% 2018 is better than 2019 as the percentage in 2018 is lower than 2019 which means Riyadh bank borrowed funds that have been used to finance the companys assets more effectively in 2018 3-Debt to equity ratio=Total debt/Sharedness equity 2018: Debt to equity ratio =177,501,064/36,169,001=4.9 2019: Debt to equity ratio=201,872,047/37,645,030=5.36 The ratio in 2019 is higher than 2018 which considered more risky because it indicates that more creditor financing bank loans is used than investor financing shareholders. 4-Eqwity multiplier = Total asset/total shareholders' equity 2018: Equity multiplier = 213,670,065/36,169,00=5.90 2019: Equity multiplier= 239,517,077/37,645,030=6.36 2018 is better as it have lower ratio that is more conservative and less dependent on debt financing and don't have high debt servicing cost. ...
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