Bit of a long shot....Efficiency Analysis

roaminblue

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Joined
27 Apr 2008
Messages
2,991
I've been asked to do some efficiency analysis into the banking sector. In particular I need to conduct financial statement analysis, take into account operational expenses, the impact of restructuring programmes (etc)

Just wondering if any accountants may be able to give me a push in the right direction.

I know the regular financial ratios I should be using (asset turnover, stock turnover, debtor collection, creditor collection) but I'm not sure all of these are relevant for the banking industry?

Is there anything other than the simple Efficiency (expenses to revenue) ratio that I could/should be using.

Thanks in advance!
 
pee dubya said:
I'm pretty sure Bluemoon doesn't sync with efficiency in any way.

hahaha!

I did say long shot<br /><br />-- Sat Oct 19, 2013 1:19 pm --<br /><br />
Hamann Pineapple said:
Just sack all the poor people and keep the rich guys at the top. That's how it seems to work.

poor people? in a bank? perish the thought
 
roaminblue said:
pee dubya said:
I'm pretty sure Bluemoon doesn't sync with efficiency in any way.

hahaha!

I did say long shot

-- Sat Oct 19, 2013 1:19 pm --

Hamann Pineapple said:
Just sack all the poor people and keep the rich guys at the top. That's how it seems to work.

poor people? in a bank? perish the thought

I'm sure Brenda who answers the phone at 2am on the phone banking might disagree with you .
 
If you're looking at operational efficiency then it's basically a case of working out the operating margin or expense ratio. In other words, how much does the bank spend on operational costs to make £1.

If you're looking at capital efficiency then it's a measure of how well the bank uses its capital base to generate income. Capital is your stock at a bank so if you've got a lot of capital lying around not generating income then you're less efficient, like a manufacturing company that makes a lot of stuff but is less good at selling it.
 
Prestwich_Blue said:
If you're looking at operational efficiency then it's basically a case of working out the operating margin or expense ratio. In other words, how much does the bank spend on operational costs to make £1.


as in expense to revenue? If I wanted to go more in depth into individual business units, I assume I wouldn't be able to find that information on the consolidated statements?

I'll have access to this information for the firm I'm working for, but they want me to do some competitor analysis against peers. But I'm assuming this sort of in depth information probably wouldn't be available publicly?

Prestwich_Blue said:
If you're looking at capital efficiency then it's a measure of how well the bank uses its capital base to generate income. Capital is your stock at a bank so if you've got a lot of capital lying around not generating income then you're less efficient, like a manufacturing company that makes a lot of stuff but is less good at selling it.

Is that right? I thought the capital counted as liabilities?

edit: wait, I think i understand. They use the capital which is converted into assets? So I just need to re-word the stock turnover ratio?

Thanks very much for your help!
 

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