Answer to Question #233050 in Economics for Sammy

Question

Explain 5 limitations of using ratio analysis as a means of assessing the bank’s performance.

Answer 1

The bank's identity for a certain period of time.

To assess the financial condition, an analysis is made of the following main aspects of a commercial bank's activities:

1) the quality of equity capital;

2) asset quality;

3) the quality of liabilities;

4) liquidity;

5) profitability