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Current Ratio: Ratio Bank of Baroda Canara Bank Interpretation and Comparison

Bank of Baroda and Canara Bank's financial ratios are compared. Canara Bank has more favorable current and quick ratios, indicating it has more liquid assets to meet short-term obligations. Bank of Baroda has a higher net profit margin as its operating and non-operating expenses are lower. Both banks have the same total asset turnover ratio, implying they utilize assets equally well to generate revenue. Canara Bank has higher return on net worth and return on asset ratios, showing it is more efficient in generating profits from shareholder equity and assets. Canara Bank's debt-equity ratio is also higher, which shareholders prefer as it benefits from creditor funds, while Bank of Baroda's lower ratio is preferred by creditors for

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Parmesh Pandey
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189 views

Current Ratio: Ratio Bank of Baroda Canara Bank Interpretation and Comparison

Bank of Baroda and Canara Bank's financial ratios are compared. Canara Bank has more favorable current and quick ratios, indicating it has more liquid assets to meet short-term obligations. Bank of Baroda has a higher net profit margin as its operating and non-operating expenses are lower. Both banks have the same total asset turnover ratio, implying they utilize assets equally well to generate revenue. Canara Bank has higher return on net worth and return on asset ratios, showing it is more efficient in generating profits from shareholder equity and assets. Canara Bank's debt-equity ratio is also higher, which shareholders prefer as it benefits from creditor funds, while Bank of Baroda's lower ratio is preferred by creditors for

Uploaded by

Parmesh Pandey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ratio Bank of Baroda Canara Bank Interpretation and Comparison

Current ratio 0.05 0.06 Bank of Baroda have less current


assets as compared to Canara Bank to
pay off its current liabilities. This
means canara bank is in more
favourable condition than bank of
Baroda.
Quick ratio 21.94 26.78 Canara bank has more favourable
ratio than bank of baroda. Canara
bank will pay off its short term
obligations very easily as compare to
bank of baroda because of availability
of more liquid assets. Also the ratio of
baroda bank affects because of it’s a/c
receivable lag period is more.
Net Profit 0.86 0.74 Net profit ratio of Baroda bank is
Margin better than canara bank. This is
happens because baroda bank
operating & non-operating expenses
are less. They will earn more income
than canara bank.
Total Asset 0.07 0.07 This ratio is same for both banks. This
Turnover ratio implies that both banks will utilise its
assets efficiently to generate revenue
Return on Net 0.94 1.16 This ratio assess whether the
Worth company has been more efficient or
less in generating the profit on
shareholder’s equity over the years.
Canara bank has more favourable
ratio. This indicates the prudent use
of shareholder’s money by Canara
Bank. Low percentage ratio of baroda
bank indicates less efficient
deployment of equity resources
Return on Asset 173.66 394.68 This ratio suggests that the income
earned by the company after effective
utilisation of assets. Canara bank have
more favourable ratio. This indicates
that canara bank can generate higher
returns from its asset as compared to
baroda bank. Higher ratio also
indicates the ability of the company to
returns the money to its investors.
Debt-Equity ratio 15.37 21.53 Debt-Equity Ratio indicates the
soundness of long term financial
policies of a company. In this ratio
there is two aspects :
1. According to the point of
Creditors : Creditors usually
like low debt-equity ratio
because this indicates more
protection of their money. In
this case baroda bank has
more favourable ratio.
According to the point of
shareholders : Shareholders usually
like high debt-equity ratio because
they like to get benefits from the
funds provided by the creditors.
Therefore, in this case Canara bank
has more favourable ratio.

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