interpret the following ratios,, identify each bank financial strength and weaknesses based on ratios. compare the performance of three banks, identify any trends or patterns observed over the three year period. discuss the potential reasons behind observed trend in ratios for each bank. offer recommendation for each bank to enhance their financial performance focusing on areas of improvement ad stratergies to leverage their strengths. a$)$ Current Ratio $=$ Total Current Assets $/$ Total Current Liabilities$($ deposit$)$

Bank A:

Current Ratio:

$20$X$1$: $(600,000,000/900,000,000)=0\mathrm{.}67.$

$20$X$2$: $(620,000,000/950,000,000)=0\mathrm{.}65$

$20$X$3(650,000,000/1000,000,000)=0\mathrm{.}65$

Bank B:

Current Ratio:

$20$X$1$ :( $450,000,000/700,000,000)=0\mathrm{.}64$

$20$X$2$: $(460,000,000/720,000,000)=0\mathrm{.}63$

$20$X$3$: $(480,000,000/750,000,000)=0\mathrm{.}64$

Bank c

Current ratio

$20$X$1(800,000,000/1,100,000,000)=0\mathrm{.}73$

$20$X$2(820,000,000/1,150,000,000)=0\mathrm{.}71$

$20$X$3(840,000,000/1,200,000,000)=0\mathrm{.}70$

$3.$ Profitability Ratios:

a$.$ Return on Assets $($ROA$)$: ROA $=($Net Income $/$ Total Assets $)*100$

Bank A:

Return on assets $($ROA$)$:

$20$X$1$ :( $120,000,000/1,200,000,000)*100\%=10\%$

$20$X$2$ :( $130,000,000/1,350,000,000)*100=9\mathrm{.}63\%$

$20$X$3$ :( $140,000,000/1,500,000,000)*100=9\mathrm{.}33\%$

Bank B

Return on assets $($ROA$)$:

$20$X$1$ :( $80,000,000/800,000,000)*100\%=10\%$

$20$X$2$ :( $85,000,000/850,000,000)*100=10\%$

$20$X$3$ :( $90,000,000/900,000,000)*100=10\%$

Bank C

Return on assets $($ROA$)$:

$20$X$1$ :( $160,000,000/1,500,000,000)*100\%=10\mathrm{.}67\%$

$20$X$2$ :( $170,000,000/1,600,000,000)*100=10\mathrm{.}63\%$

$20$X$3$ :( $180,000,000/1,700,000,000*100=10\mathrm{.}59\%$

b$)$ Return on Equity $($ROE$)$: ROE $=($Net Income $/$ Total Equity$)*100$

Bank A

equity $-=$total asssets minus total depostit

$20$X$1$ :( $120,000,000/1,200,000,000-900,000,000)*100\%=40\%$

$20$X$2$ :( $130,000,000/1,350,000,000-950,000,000)*100=33\%$

$20$X$3$ :( $140,000,000/1,500,000,000-1000,000,000)*100=28\%$

Bank B

ROE$=$ Net Income$/$Total Equity$)*100$

$20$X$1$ :( $80,000,000/800,000,000-700,000,000)*100\%=80\%$

$20$X$2$ :( $85,000,000/850,000,000-720,000,000)*100=65\%$

$20$X$3$ :( $90,000,000/900,000,000-750,000,000)*100=60\%$

Bank C

ROE$=$ Net Income$/$Total Equity$)*100$

$20$X$1$ :( $160,000,000/1,500,000,000-1100,000,000)*100\%=40\%$

$20$X$2$ :( $170,000,000/1,600,000,000-1150,000,000)*100=38\%$

$20$X$3$ :( $180,000,000/1,700,000,000-1200,000,000)*100=36\%$

c$)$ Net interest Margin $($NIM$)=$ Net income$/$ Average earning assets$*100$

Bank A

$20$X$1$: $120,000,000/600,000,000*100=20\%$

$20$X$2$: $130,000,000/620,000,000*100=20\mathrm{.}97$

$20$X$3$: $140,000,000/650,000,000*100=21\mathrm{.}54$

Bank B

$20$X$1$: $80,000,000/450,000,000*100=17\mathrm{.}78\%$

$20$X$2$: $85,000,000/460,000,000*100=18\mathrm{.}49\%$

$20$X$3$: $90,000,000/480,000,000*100=18\mathrm{.}75\%$

Bank C

$20$X$1$: