4.2 Current ratio
Current ratios for 2007 to 2011 were 34.5%, 30.5%, 33.7%, 36.9% and 34.5% (see Appendix Table 1.), respectively. This index shows a company’s short-term liquidity. BMO is a total mature company and handles its liquidity well (except for 2008, in which year Subprime Crisis took place). Meanwhile, the liquidity performance tends to go better.
4.3 Debt ratio.
Among various debt ratios, we set out the ratio of liabilities to assets of each year for this index is most widely used in valuating a company’s debt capacity as well as assessing its risk. From 2007 to 2011, BMO’s ratios of liabilities to assets were 95.8%, 95.7%, 94.8%, 94.7% and 94.1% respectively (BMO, 2011b). While the ratios kept stable around 94% to 96%, which is common among banks, there’s a trend that BMO’s ratio is decreasing. I suppose this shows a moderate attitude in BMO’s operating.
According to data, the revenue which has been adjusted jumps from ,257 million to ,467 million with an increasing rate of 10% in 2011. By contrast, the rate is 5% in 2010 and 9% in 2009. The revenue which has been reported increases from 1,508 million to ,718 million with the rate of 12%. It is reported that the revenue in Canada is 8.5% on average, in comparison to 4.9% in North America (BMO, 2011b).
4.5 Return on equity (ROE)
Adjusted ROE increased to 15.3% from 15% in 2010, while reported ROE, from 14.9%. In the past 22 years, the ROE of BMO is 13% and could be higher. It said that ROE in average in Canada was 15.7% which is higher than that of 2012 which is just 15.2%. Moreover, in North Ameraca, it is 12.4%(BMO, 2011b).