Joshua & White (J&W) Technology’s financial statements are also shown
here. Answer the following questions. (Note: Industry average ratios are
provided in Ch03 P15 Build a Model.xlsx.)
a. Has J&W’s liquidity position improved or worsened? Explain.
b. Has J&W’s ability to manage its assets improved or worsened? Explain.
c. How has J&W’s profitability changed during the last year?
d. Perform an extended DuPont analysis for J&W for 2018 and 2019. What
do these results tell you?
e. Perform a common size analysis. What has happened to the
composition (that is, percentage in each category) of assets and
f. Perform a percentage change analysis. What does this tell you about
the change in profitability and asset utilization?
e changes in the inflation where there is constant change in the general price level in the economy, which has an influence on revenue and cost of banking institutions. Among the results that could have affected income and expense of the bank, the following are listing : Probable chances of high short-term interest rates, shortening margins and creating fund problem due to increase in costs. A possible increase in variable, cost due to the fact that financial environments have become highly competitive. The possibilities of market ability for tax exempted securities along with credit problem arising. Rare occurrence of comparatively low interest rate, murky income compared to high interest rates. A risk that, successful innovators will be focused on expansion, both inside and outside their trading areas which can result in generation loss for banks. Hence, from all the factors given above we can identify internal and external factors as the two main factors that determine the performance of banks. Internal determinants are factors that can be controlled by management. These factors are obtained from accounts (balance sheet, income and expenditure statement) and thus can be termed as micro or bank specific determinants of bank profitability. Factors that are beyond the control of management are stated as external determinants. These determinants are factors that are not correlated to bank management but reveal legal and economic environment that effects the operation and performance of financial institutions. They are further limited into industry -specific and macroeconomic factors. Determinants of Bank Performance: In general the banks performance would be gauged by taking into various fact>GET ANSWER