Analysis and Interpretation current ratio The current ratio has declined marginally, despite the increase in cash

balance and overall current assets. The rise in current assets has been counterfeited by the corresponding increase in the liabilities in comparison to last year. The liabilities have risen mainly due to very dramatic increase in the other liabilities that constitute Accrued expenses and mark-up / return / interest payable in local currency mainly and that have risen by far this year. This year, there is further a decline in the savings customer accounts (remunerative and non-remunerative), that too are a part of the current assets. However the ratio is far better this year, in comparison to 2010 when it was the worst so far.

Working capital
We can see in on the above graph that negative working capital is showing means that the business currently is unable to meet its short-term liabilities with its current assets. Therefore, an instantaneous increase in sales or additional capital into the company is necessary. In 2008 negativity decreased that show gradually increases in sale but in 2009 again the assets reduced as compared to liabilities which affect its power to pay its short term obligation Analysis and Interpretation debt ratio

A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. It indicates that 87% of the companys total assets are financed through the debts of the company in 2008. This ratio remains constant in 2008 and increase in 2010 as 1%, as compared to 2008, which is not good. Debt to equity By analysis this graph we conclude that bank Debt/equity ratio is continually decreasing during 2008 to 2009. It not shows the good position. It means low investment from shareholders funds.

Net profit Interpretation This is the ratio of net profit after taxes to net sales. This ratio measures the overall profitability of the company. The profit margin indicates how much profit a company produces against every one Rupee. NBP have sufficient profitability ratio (25.36%, 22.53%,19.85% respectively) but decreasing with every passing year. The net profit ratio has fallen than previous years due to heavy cost of sales.
Analysts use performance indicators to establish the effectiveness of a company. Profits are one of the primary indicators used by analysts to ascertain a company's performance. In order for a company to have long-term success and survive as a business, the company must eventually have profits. Net profit margin is one of the key indicators used to evaluate a company's performance as this margin calculates a company's net income as a percentage of the company's sales. Several factors directly contribute to the change in a company's net profit margin. A high net profit margin shows that a company can convert sales into profits. The net profit margin also considers all of the costs associated with the sale of the products.

Price Increase or Decrease

One of the primary factors that contribute to the change in net profit margin is an increase or decrease of the price of the sold units. Price changes greatly affect how many units a company can sell, which in turn influences the overall profit numbers. Pricing items correctly with acceptable profit margins is challenging for many businesses, especially in a competitive market. Ultimately, the price point of the company's products can either increase the company's profits or become a primary factor responsible for decreasing the company's net profit margin.

Inventory
Inventory is another factor that contributes to changes in a company's net profit margin. Although a company records inventory as an asset on the balance sheet, the company does not report the cost of a sale until the company has actually made the sale. It is possible for a company to calculate the cost of goods in an inventory. However, an economic slowdown can greatly decrease the value of a company's inventory. This devaluation of inventory will affect the company's net profit margins. On the other hand, moving inventory and increasing the company's sales can have a positive impact on net profit margin.

Variable Business Costs

A business's variable costs fluctuate with the volume of units produced or sold and directly affect the net profit margin for the company. Examples, of variable costs include taxation, sales commissions and the cost of raw materials used to produce products. The fundamental quality of this type of expense is its variable nature. For example, the amount of sales commissions paid by the business will typically increase as the business sells more products.

Fixed Business Costs

An increase or decrease in the cost of overhead can also affect a company's net profit margin. Overhead represents fixed costs for the business. Examples of overhead include management salaries, rent expenses and depreciation expenses. As fixed costs, businesses have to pay overhead expenses on an ongoing basis, and these costs will not fluctuate with the volume of units produced or sold. Even though these costs will not change based on sales or production volume, fixed costs still affect the profit margin for the company.

Interpretation g.p margine Gross profit ratio may indicate to what extent the selling prices of goods per unit is Reduced without increasing losses on operations. It reflects the efficiency with which a firm produces its products. Gross profit margin indicates how well the company can generate a return at the gross profit level. Gross profit ratio of NBP in 2008 is good but decrease in 2009 and again increase in 2010 by 1% but it is less then as compare to 2008.
When I analyse the gross profit margin by comparing to previous accounting period, I found that there is an increase in gross profit margin. Can you tell me what are some of the reasons for the increase in gross margin? What if it shows decrease in gross profit margin, please also give me some major reason? Answer: When you compare to previous accounting periods, the increase in gross profit margin may due to the following factors: An increase in selling price without corresponding increase in costs A decrease in costs without corresponding reduction in selling price Opening stock in trade is valued at a figure lower than should have been Purchases are stated at a lower figure than it should have been because of omission of invoices for purchases Sales figures are inflated because goods sent on consignments may have been inadvertently included Closing stock is valued at a higherfigure than it should have been. Vice versa, when you see a decrease in gross profit margin when comparing to previous accounting periods, some of the reasons may be due to: A decrease in selling price without any corresponding decrease in costs An increase in costs without any corresponding increase in selling price

 Wrong valuation of closing stock re: valued at a lower figure Goods purchased by proprietors have been included in purchases Stocks might be misappropriated

Time interest earned Analysis and Interpretation As apparent, 2008 was a comparatively better year with regards to interest cover. The interest coverage ratio is used to determine how easily a company can pay interest expenses on outstanding debt. The lower the ratio, the more the company is burdened by debt expense. As a general standard, when a company's interest coverage ratio is only 1.5 or lower, its ability to meet interest expenses may be questionable. As apparent, from being marginally acceptable last year it has entered the questionable cover ratio. The cover ratio has fallen below the benchmark this year. This is mainly due to earnings increasing negligibly and on the contrary interest increasing dramatically.