Question 1

Describe the Islamic bank you have selected to study: The name, size (e.g. Market capitalization, % of the GDP), major Islamic banks operating in the country, the extent of competition, key current trends, and relevant macroeconomic that are affecting the industry, the outlook of the industry. (ADIB / Abu Dhabi Islamic Bank)

(10 marks)

1. Explicitly describe what each ratio means in the context of the companies that you are analyzing.

2. Identify the company that is stronger on each particular measure.

3. Discuss your interpretation of the comparison and its implications. Size (Total Assets, Total Sales)

4. Finally, if you had AED10,000 to invest in one of the companies you have analyzed, which would be the better investment and why?

• Age (Number of years in operation)
• Liquidity Ratio (Current Assets/Current Liabilities), Cash Holdings (Cash/Assets)
• Leverage Ratio (Total Debt/Total Assets, Long-term Debt / Total Assets, Short-term
• Debt/Total Assets, Total Debt / Equity)
• Return on Equity (ROE), Return on Assets (ROA)
• Price-Earnings Ratio (P/E)
• Year-end stock prices for the last five years