Interpret the following ratios, identify the financial strength and weaknesses of each bank based on the ratio analysis. discuss potential reasons observed in the ratios for each bank. offer recommendations for each bank to enhance their financial performance focusing on the areas of improvement and strategies to leverage their strengths. 

Current Ratio:

Bank A:

20X1: (900,000,000/600,000,000) =1.5

20X2: (950,000,000/620,000,000) =1.53

20X3     (1,000,000,000/650,000,000) =1.54

Bank B:

Current Ratio:

20X1 :( 700,000,000/450,000,000) =1.56

20X2: (720,000,000/460,000,000) =1.57

20X3: (750,000,000/480, 000,000)=1.56

Bank c

Current ratio

20X1 (1,100,000,000/800,000,000) = 1.38

20X2 (1,150,000,000/820,000,000) = 1.40

20X3 (1,200,000,000/840,000,000) = 1.43

Profitability Ratios:

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

Bank A:

Return on assets (ROA):

20X1 :( 120,000,000/1,200,000,000)*100%=10%

20X2 :( 130,000,000/1,350,000,000)*100=9.63%

20X3 :( 140,000,000/1,500,000,000)*100=9.33%

Bank B

Return on assets (ROA):

20X1 :( 80,000,000/800,000,000)*100%=10%

20X2 :( 85,000,000/850,000,000)*100=10%

20X3 :( 90,000,000/900,000,000)*100=10%

Bank C

Return on assets (ROA):

20X1 :( 160,000,000/1,500,000,000)*100%=10.67%

20X2 :( 170,000,000/1,600,000,000)*100=10.63%

20X3 :( 180,000,000/1,700,000,000)*100=10.59%

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

Bank A

ROE:

20X1 :( 120,000,000/300,000,000)*100= 40%

20X2 :( 130,000,000/330,000,000) *100= 39.40%

20X3 :( 140,000,000/350,000,000)*100 = 40%

Bank B

ROE= Net Income/Total Equity)*100

20X1 :( 80,000,000/250,000,000)*100%=32%

20X2 :( 85,000,000/260,000,000)*100=32.70%

20X3 :( 90,000,000/270,000,000)*100=33.33%%

Bank C

ROE= Net Income/Total Equity)*100

20X1 :( 160,000,000/300,000,000)*100%=53.33%

20X2 :( 170,000,000/330,000,000)*100=51.52%

20X3 :( 180,000,000/360,000,000)*100=50%