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Student name: Temuulen Tumurkhuyag

Student ID: 106034578

Date: 2018/06/03

2018
Financial Statement Analysis of

TRADE AND DEVELOPMENT BANK OF MONGOLIA LLC

1. Horizontal Analysis
Computation of Dollar Changes and Percent changes
TRADE AND DEVELOPMENT BANK OF MONGOLIA LLC AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position As at 31 December 2017 and 2016

Assets 2017 MNT’000 2016 MNT’000 Euro change Percent change
Cash and due from banks 1,073,933,382 1,188,822,410 -114,889,028 -9.664103489
Investment securities 2,026,286,707 1,525,435,217 500,851,490 32.83335041
Investment in associates and
60,841,264 59,490,789 1,350,475 2.270057302
joint ventures
Loans and advances, net 2,764,974,569 2,835,167,306 -70,192,737 -2.475788178
Bills purchased under resale
11,981,945 0 11,981,945 0
agreements
Subordinated loans 4,000,000 -4,000,000 -100
Property and equipment, net 324,138,590 333,559,483 -9,420,893 -2.824351721
Intangible assets, net 2,587,186 5,048,116 -2,460,930 -48.74947406
Investment property 91,951,413 88,923,950 3,027,463 3.404552992
Foreclosed real properties, net 2,808,306 2,194,609 613,697 27.96384231
Other assets 515,421,954 602,543,026 -87,121,072 -14.45889642
Total assets 6,874,925,316 6,645,184,906 229,740,410 3.457246311

Liabilities and shareholders’
equity
Liabilities
Deposits from customers 3,070,233,636 2,415,529,106 654,704,530 27.10398017
Deposits and placements by
banks and other financial 243,907,591 143,207,671 100,699,920 70.31740639
institutions
Bills sold under repurchase
129,960,388 129,960,388 0 0
agreements
Borrowings 1,068,669,444 1,392,176,891 -323,507,447 -23.23752456
Current tax liabilities 20,303 1,524,308 -1,504,005 -98.66805134
Debt securities issued 1,344,633,676 1,569,366,930 -224,733,254 -14.31999424
Subordinated debt issued 24,895,300 -24,895,300 -100
Other liabilities 141,967,647 209,373,587 -67,405,940 -32.19409906
Total liabilities 5,999,392,685 5,886,034,181 113,358,504 1.925889326
Equity
Share capital 50,000,011 50,000,011 0 0
Share premium 19,272,456 19,272,456 0 0
Capital adjustments -1,583,600 1,583,600 -100
Revaluation reserves 130,014,323 126,992,124 3,022,199 2.379831839
Accumulated unrealised gain on
13,721,669 30,219,254 -16,497,585 -54.59295918
available-for-sale financial assets
Accumulated unrealised gain on
72,371,681 14,905,402 57,466,279 385.5399472
valuation of cash flow hedges
Retained earnings 590,152,491 516,572,740 73,579,751 14.24383157
Total equity attributable to equity
875,532,631 756,378,387 119,154,244 15.75325869
holders of the Group
Non-controlling interests 2,772,338 -2,772,338 -100
Total equity 875,532,631 759,150,725 116,381,906 15.33054006
Total liabilities and equity 6,874,925,316 6,645,184,906 229,740,410 3.457246311

Consolidated Statements of Comprehensive Income

For the years ended 31 December 2017 and 2016

2017 MNT’000 2016 MNT’000 Euro change Percent change
Interest income 612,882,220 593,217,355 19,664,865 3.31495106
Interest expense -434,121,831 -400,832,691 -33,289,140 8.304996261
Net interest income 178,760,389 192,384,664 -13,624,275 -7.081788494
Net fee and commission income 37,039,956 30,618,600 6,421,356 20.9720758
Other operating income, net 47,974,223 12,021,005 35,953,218 299.0866238
Net non-interest income 85,014,179 42,639,605 42,374,574 99.37843936
Operating income 263,774,568 235,024,269 28,750,299 12.23290647
Operating expense -89,930,081 -92,650,037 2,719,956 -2.935731154
Share of profit of associates and
15,858,850 17,296,485 -1,437,635 -8.31171767
joint ventures
Provision for impairment losses -115,562,031 -91,997,632 -23,564,399 25.61413646
Profit before tax 74,141,306 67,673,085 6,468,221 9.558040689
Income tax expense -381,360 -212,876 -168,484 79.14654541
Net profit for the year 73,759,946 67,460,209 6,299,737 9.338448685
Other comprehensive income for
the year:
Items that will never be
reclassified to profit or loss
Net change in revaluation
reserves of property and 3,022,199 -7,317,887 10,340,086 -141.2987929
equipment
Items that are or may be
reclassified to profit or loss
Net unrealised change in fair
-16,497,585 54,050,383 -70,547,968 -130.5226052
value of available-for-sale
financial assets
Net unrealised gain (loss) on
57,466,279 -25,032,960 82,499,239 -329.5624609
valuation of cash flow hedges
Other comprehensive income 43,990,893 21,699,536 22,291,357 102.727344
Total comprehensive income for
117,750,839 89,159,745 28,591,094 32.06726758
the year
Profit attributable to:
Equity holders of the Group 73,759,946 67,965,541 5,794,405 8.525504123
Non-controlling interests 0 -505,332 505,332 -100
Net profit for the year 73,759,946 67,460,209 6,299,737 9.338448685
Total comprehensive income
attributable to:
Equity holders of the Group 117,750,839 89,665,077 28,085,762 31.32296647
Non-controlling interests 0 -505,332 505,332 -100
Total comprehensive income for
117,750,839 89,159,745 28,591,094 32.06726758
the year

2. Trend Analysis

2014 2015 2016 2017
Net sales 444,673,852 532,856,753 612,882,220 593,217,355
Cost of sales -296,489,329 -358,520,676 -434,121,831 -400,832,691

2014 is base year. Set to 100%

2014 2015 2016 2017
Net sales 100% 119 97
Cost of sales 100% 120 92
140

120

100

80
Net sales
60 Cost of sales

40

20

0
2014 2015 2016 2017

2014 2017 Trend percent
(2014 vs 2017
Net sales 444,673,852 593,217,355 133.4%
Cost of sales -296,489,329 -400,832,691 135,1%

3. Vertical Analysis
Consolidated Statements of Financial Position
Common-Size Statements

Assets 2017 MNT’000 2016 MNT’000 2017 (%) 2016(%)
Cash and due from banks 1,073,933,382 1,188,822,410 15.62 17
Investment securities 2,026,286,707 1,525,435,217 29.47 22.96
Investment in associates and
joint ventures 60,841,264 59,490,789 0.88 1.48758E-06
Loans and advances, net 2,764,974,569 2,835,167,306 40.22 41.24
Bills purchased under resale
agreements 11,981,945 0 0.17 0.00
Subordinated loans 4,000,000 0.00 0.00
Property and equipment, net 324,138,590 333,559,483 4.71 5.02
Intangible assets, net 2,587,186 5,048,116 0.04 0.08
Investment property 91,951,413 88,923,950 1.34 1.34
Foreclosed real properties, net 2,808,306 2,194,609 0.04 0.03
Other assets 515,421,954 602,543,026 7.50 9.07
Total assets 6,874,925,316 6,645,184,906 100.00 100.00

Liabilities and shareholders’
equity
Liabilities
Deposits from customers 3,070,233,636 2,415,529,106 44.66 36.35
Deposits and placements by
banks and other financial
institutions 243,907,591 143,207,671 3.55 2.16
Bills sold under repurchase
agreements 129,960,388 129,960,388 1.89 1.96
Borrowings 1,068,669,444 1,392,176,891 15.54 20.95
Current tax liabilities 20,303 1,524,308 0.00 0.02
Debt securities issued 1,344,633,676 1,569,366,930 19.56 23.62
Subordinated debt issued 24,895,300 0.00 0.37
Other liabilities 141,967,647 209,373,587 2.07 3.15
Total liabilities 5,999,392,685 5,886,034,181 87.26 88.58
Equity
Share capital 50,000,011 50,000,011 0.73 0.75
Share premium 19,272,456 19,272,456 0.28 0.29
Capital adjustments -1,583,600 0.00 -0.02
Revaluation reserves 130,014,323 126,992,124 1.89 1.91
Accumulated unrealised gain
on available-for-sale financial
assets 13,721,669 30,219,254 0.20 0.45
Accumulated unrealised gain
on valuation of cash flow
hedges 72,371,681 14,905,402 1.05 0.22
Retained earnings 590,152,491 516,572,740 8.58 7.77
Total equity attributable to
equity holders of the Group 875,532,631 756,378,387 12.74 11.38
Non-controlling interests 2,772,338 0.00 0.04
Total equity 875,532,631 759,150,725 12.74 11.42
Total liabilities and equity 6,874,925,316 6,645,184,906 100.00 100.00

Consolidated Statements of Comprehensive Income

2017 MNT’000 2016 MNT’000 2017 (%) 2016 (%)
Interest income 612,882,220 593,217,355 100.00 100.00
Interest expense -434,121,831 -400,832,691 -70.83 -67.57
Net interest income 178,760,389 192,384,664 29.17 32.43
Net fee and commission
income 37,039,956 30,618,600 6.04 5.16
Other operating income, net 47,974,223 12,021,005 7.83 2.03
Net non-interest income 85,014,179 42,639,605 13.87 7.19
Operating income 263,774,568 235,024,269 43.04 39.62
Operating expense -89,930,081 -92,650,037 -14.67 -15.62
Share of profit of associates
and joint ventures 15,858,850 17,296,485 2.59 2.92
Provision for impairment losses -115,562,031 -91,997,632 -18.86 -15.51
Profit before tax 74,141,306 67,673,085 12.10 11.41
Income tax expense -381,360 -212,876 -0.06 -0.04
Net profit for the year 73,759,946 67,460,209 12.03 11.37
Other comprehensive income
for the year:
Items that will never be
reclassified to profit or loss
Net change in revaluation
reserves of property and
equipment 3,022,199 -7,317,887 0.49 -1.23
Items that are or may be
reclassified to profit or loss
Net unrealised change in fair
value of available-for-sale
financial assets -16,497,585 54,050,383 -2.69 9.11
Net unrealised gain (loss) on
valuation of cash flow hedges 57,466,279 -25,032,960 9.38 -4.22
Other comprehensive income 43,990,893 21,699,536 7.18 3.66
Total comprehensive income
for the year 117,750,839 89,159,745 19.21 15.03
Profit attributable to:
Equity holders of the Group 73,759,946 67,965,541 12.03 11.46
Non-controlling interests 0 -505,332 0.00 -0.09
Net profit for the year 73,759,946 67,460,209 12.03 11.37
Total comprehensive income
attributable to:
Equity holders of the Group 117,750,839 89,665,077 19.21 15.12
Non-controlling interests 0 -505,332 0.00 -0.09
Total comprehensive income
for the year 117,750,839 89,159,745 19.21 15.03

Income Statement

Income statement

Cost of sales
Operating income
Income tax expense
Other comprehensive income
Assest

Assest
Cash and due from banks

Investment securities

Investment in associates and
joint ventures
Loans and advances, net

Bills purchased under resale
agreements
Subordinated loans

Property and equipment, net

Equity
Share capital

Share premium

Capital adjustments

Revaluation reserves

Accumulated unrealised gain on
available-for-sale financial
assets
Liability
Deposits from customers

Deposits and placements by
banks and other financial
institutions
Bills sold under repurchase
agreements

Borrowings

Current tax liabilities

4. Working Capital

Current assets

Current liabilities

Working capital
=

Working capital = 6,874,925,316 - 5,999,392,685 = 875,532,631

5. Current Ratio
Current Assets
Current Ratio =
Current Liabilities

Current Ratio = 6,874,925,316/5,999,392,685 = 1.145936877
6. Acid-Test Ratio

Cash + Short-term investments + Current receivables
Acid-test ratio =
Current Liabilities

Acid-Test Ratio= (1,073,933,382+ 2,026,286,707+0)/ 5,999,392,685= 0.51675565

7. Accounts Receivable Turnover
Accounts Net sales
receivable =
turnover Average accounts receivable, net

Accounts receivable turnover= 612,882,220/ 365316529.5= 1.677674484

Average accounts receivable= (612,882,220+ 117,750,839)/2= 365316529.5

8. Inventory Turnover
Cost of goods sold
Inventory
turnover = Average inventory

Inventory Turnover= 434,121,831/0=0

9. Day’s Sales Uncollected

Day's sales Accounts receivable, net × 365
=
uncollected
Net sales

Day’s Sales Uncollected = 1.677674484/612,882,220 x 365= 0.009964
10. Days’ Sales in Inventory

Day's
Ending inventory × 365
sales in =
Inventory
Cost of goods sold
Day's sales in
Inventory= 117,750,839/434,121,831x365= 99.002
11. Total Asset Turnover
Net sales
Total asset
turnover = Average total assets

Total Asset Turnover= 612,882,220/ 3437462658= 0.178294946

12. Debt and Equity Ratios

Debt ratio= 5,999,392,685/ 6,874,925,316= 0.872648416

Equity ratio= 5,999,392,685/ 875,532,631= 6.852277657

13. Times Interest Earned

= 74,141,306/ 73,759,946= 1.005170286

14. Profit Margin

= net profit/net sales= 73,759,946/ 612,882,220= 0.1203493

15. Return on Total Assets
Net profit
Return on total
=
asset Average total assets

= 73,759,946/3437462658= 0.021457672
16. Return on Total Assets

= profit margin * total assest turnover= 0.1203493*0.178294946= 0.021457672

17. Return on Ordinary Shareholders’ Equity

= 73,759,946/875,532,631=0.084245799