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Bank Valuation: Understanding Key Ratios and Metrics

Tom Spencer

Image 1: Illustrative example of a bank’s net interest income and margin Source: CIBC’s 2022 Annual Report 1.2 Efficiency ratio The efficiency ratio measures effective cost management and operational efficiency, and is defined as non-interest expenses divided by revenue. All else being equal, a lower number is better.

Metrics 88
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Bank Profitability: Decoding the Income Statement

Tom Spencer

A bank’s income statement can be simplified into five main line items: Net interest income Non-interest income Operating expenses Provision for credit losses (PCL) Tax Image 1: Illustrative example of a bank’s income statement Source: CIBC’s 2022 Annual Report 1. Image 2: Illustrative example of a bank’s non-interest income 3.

Banking 88
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How Business Intelligence Aids Business Decision Making

Tom Spencer

Consider a company operating in the retail industry, which has a large assortment of different products in its inventory and a dozen stores. For example, the top sold products could differ from store to store. This reduces assets on the balance sheet and increases expenses on the income statement, resulting in a decrease in net profit.

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Human Resources Management – How to Get Started

Tom Spencer

Human resource teams are critical to the growth of a company since employees typically represent both the biggest operating expense and largest off-balance sheet asset for most businesses. For example, in many technology companies software engineers are organized in a leveling structure. Compensation.

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What is a Healthy Company?

Markovitz Consulting

Similarly, one of the primary drivers of GE’s fall from grace was the reckless pursuit of profits from its financing operations. Healthy companies understand that they have a vital role to play in the health of the communities in which they operate. What makes for a healthy company?

Company 124
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Overcoming Data Collection Challenges in Consulting

Tom Spencer

We repeated our request a week later, but they only provided a balance sheet from the previous year. For example, instead of asking for the average payroll for each department over time, ask for a representative current salary of an employee in each department: sales, operations, finance.

Data 78
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The Importance of Business Acumen for High Performance

LSA Global

We believe that employees need to better understand the key factors that affect a company’s operations and financial strength to improve decision-making and strategy execution. Operating income. Operating Expenses. Study the Balance Sheet. With term definitions in hand, analyze your company’s balance sheet.