The instruments of the ratio analysis in the assessment of economic and financial situation of the bank

Abstract

The activity of every bank is regularly submitted control and assessment. One of the method’s serving the measurement of financial condition and the effectiveness of the activity of the bank is the ratio analysis. It is the calculation of the rates on the basis of the data included in the financial reports and their comparative assessment in time. The rates are constructed on the basis of mathematical rule of comparison of the two quantities which is the designating of their ratio.
 In the article there were characterized the six groups of the rates. There are the following ones:
 
 the rate of capital adequacy;
 the measures characterising the accounting liquidity;
 
 
 the values of the assets and liabilities;
 
 
 the artes of profitability;
 the rate of the effectiveness of the usage of the resources (the productivity index);
 the rates of stock market.
 
 Ratio analysis is the commonly used financial instrument for the assessment of economic and financial condition of the bank. The method requires the appropriate selection of the taxonometric tools. They must meet the needs and simultaneously give the complex picture of the situation. While making the interpretation of the obtained results, it is essential to make the analysis of their reason to show the changes and to make the assessment of the results of them. The designated values of the rates and their assessment are the subject of interest especially of the owners of the bank and the people who manage, these are: the banking supervision, investors, clients and the individuals and legal persons cooperating with the bank.