Findings about Gross Profit Ratio

Gross profit margin indicates the basic cost structure of the company.According to the result of MBL
the gross profit ratio are considering 30.40%, 36.38%, and % for the year 2015 to 2017. It
provides positive information that it is increasing gradually.It indicates that company is getting
stable return from sales. In the year 2017, the gross profit margin ratio iswhich.is the.highest.value. So
we can say MBL generates good returns from it sales

There is an stable trend in the debt to equity capital ratio of Mercantile Bank Ltd. from 2015 to
2017. The debt to equity capital ratio of Mercantile Bank has decreased from 9.2 7 in 2015
to7.25 in 2017 over3 years period of time. It means that their liability is decreasing at a
averagerate than their equity capital from 2015 to 2017. This higher outcome over years not only
decreases the risk but also increases the profit. Overall this implies that their leverage and overall
risk is decreasing. Additionally, it also means that their expected earnings might increase due to
escalating leverage.

Recommendarion
For achieving profit target they sanctioned the loan in lack of mortgage. For that reason borrower not
willing to pay their loan in due time. They have lack of monitoring to the borrower.

Inaccurate data of creditors when MBL sanction loan, it require financial statement of borrower but
borrowers not prepare their financial statement accurately. Collection and compilation of these data are
very labourious. So analysis of performances of risk and borrower are difficult.

The credit scheme of the MBL is not enough in number to satisfy the demand of consumer. Thats why
they can not minimize the cost of financing from head office.

Most of the employee do not have enough knowledge about the modern product that is used to protect
risk on the ground of credit and foreign exchange risk.

Rate determination is not based on demand and supply of foreign exchange in a large extent. In that case
Bank policy is not same with the government policy.

All shorts of banking activities have not yet been computerised.