Financial Ratios Approach to Evaluating Financial Performance of Cal Bank Ghana from 2010 to 2014

This study was undertaken to evaluate financial performance of Cal Bank Limited. Its main objective was to examine empirically the financial performance of the bank in terms of its financial healthiness, liquidity, profitability, credit risk and solvency and efficiency for the period of 2010-2014. The study employed Altman Z-Score which combines five common ratios in a multivariate formula for predicting financial healthiness, financial ratios such as Return on Asset (ROA), Return on Equity (ROE), Profit Expense Ratio (PER), Loan to Deposit ratio (LDR), Cash To Deposit Ratio (CDR), Loan to Assets Ratio (LAR), Debt to Equity Ratio (DER), Debt to Total Asset Ratio (DTAR), Equity Multiplier (EM), Asset Utilization (AU), Income to Expense ratio (IER) and Operating Efficiency (OE). This study found that the bank had been financially healthy within the five years under study and all results of profitability ratios indicate that Cal Bank was profitable. Cal Bank was consistently improving and performing better in making good returns on Investment (assets), satisfying their shareholders in offering competitive or even better returns, making good returns customers’ deposits and also managing their operating expenses over the years. Besides, an overall analysis of all liquidity, efficiency, and risk and solvency measures reveals that Cal Bank was less liquid, efficient in asset utilization, income generation, and managing its expenses and less risky and more solvent. However, the results also show that Cal Bank is improving overtime considerably in these liquidity, efficiency and risk & solvency measures during the period under the study.