Still so many mistakes and lack of command

over methodology has been observed

You are advised to modify and update your
proposal in order to remove plagiarized work and
resubmit it till 26th June, 2016 via email. Until
then your status will be remained as Needs
Improvement.
However, in case of none submission within due
time period, your final status will be declared as
Fail. Plagiarized report file is also provided for
your better guidance.

Topic: Credit Risk Analysis

Name of the student: Yasmin Safdar
ID of the student: mc140401473
Name of the University: Virtual University
Date of submission: 17th June 2016

TABLE OF CONTENTS
Page No.
1.

Section I
INTRODUCTION
1.1
1.2

1.3
1.4
2.

3.

4.

HISTORY
TOPIC/PROJECT INTRODUCTION

04
04

1.2.
1
1.2.
2

Introduction

04

Description

04

OBJECTIVES
SIGNIFICANCE

PROJECT PROCEEDINGS
2.1
2.2
2.5

04 - 05

COMPANIES PROFILES
RATIO ANALYSIS
COMPARISONS

05
05
06 07
06
07
07

METHODOLOGY

08

3.1
3.2
3.3

08
08
08

DATA COLLECTION SOURCES

DATA COLLECTION TOOLS
DATA PROCESSING TOOLS
Section II
Introduction of the Student??????????????

09

BIBLIOGRAPHY

INTRODUCTION
Introduction of the Project
As the topic shows, this project is related to the risk
caused by credit. We have to find out the risk through
ratios that to which extent this risk can be taken.
Whether this risk is only risk or it may be profitable for
the organization. We also want to find out that to what
type of persons should be given the credit which may
return the money to the organization?
A. Liquidity Ratios
Current Ratio
Quick Ratio
Receivable Ratio

B. Coverage Ratios
Earnings Before Interest and Taxes (EBIT)/Interest
Net Profit + Depreciation, Amortization/ Long-Term Debt
C. Leverage Ratios
Fixed/ Worth Ratio
Background
As the credit risk is about the loss of principal and
interest amounts. The loss may be partial or complete. It
may exist in different conditions. Credit risk refers to the
probability of loss due to a borrowersborrowers failure
to make payments on any type of debt. Credit risk
management, meanwhile, is the practice of mitigating
those losses by understanding the adequacy of both a
banks capital and loan loss reserves at any given time
a process that has long been a challenge for financial
institutions. The global financial crisis and the credit

crunch that followed put credit risk management into

the regulatory spotlight. As a result, regulators began to
demand more transparency. They wanted to know that a
bank has thorough knowledge of customers and their
associated credit risk. And new Basel III regulations will
create an even bigger regulatory burden for banks. To
comply with the more stringent regulatory requirements
and absorb the higher capital costs for credit risk, many
banks are overhauling their approaches to credit risk. But
banks who view this as strictly a compliance exercise are
being short-sighted. Better credit risk management also
presents an opportunity to greatly improve overall
performance and secure a competitive advantage.

Objectives
The objective of the project is to carry out credit risk
analysis of Allied Bank Limited and United Bank Limited
for recently closed three financial years. The financial
analysis will be carried out by using financial
techniques such as ratio analysis, trend analysis, and
review of descriptive analysis on the data available in
the annual report of these banks.
Significance
Activity ratio analysis is an important method used by interested
parties such as investors, creditors and the management for
analysis of past, current and future activities of the company. It
also helps the management to know that how we can improve
the performance of the company making comparison with other
companies and also the industry averages.

Irrelevant
Your analysis is credit risk not activity

In significance section, you are supposed to mention how your

project and work will be beneficial for different stakeholders (i.e.
managers, investors, creditors and employees.) of the selected
organizations or banks? What is the importance of this study?

PROJECT PROCEEDINGS
Banks Profiles
Introduction
Background
Introduction of the selected banks
Objectives
Signifincance
Data analaysis
Complete profiles of both banks will be given in the final project.

Ratio Analysis
Provide relevant ratios that can be used to assess credit risk

You should explore your earlier studied courses of finance and commerce in
this regard
1. Current Ratio
2. Quick Ratio
3. Coverage Ratios
4. Receivable Ratio

Earnings Before Interest and Taxes (EBIT)/Interest

Net Profit + Depreciation, Amortization/ Long-Term Debt
Fixed/Worth Ratio
Review of Descriptive Information
After completion of quantitative data a detailed review of
descriptive information shall be made properly to reach proper
understanding.

Interpretations: Results will be interpreted at end of study

with the help of graphical presentation.
Conclusions: Proper conclusion / findings will be made after
comparing the results.
Recommendations:
Recommendation
and
proposed
solutions will be made for strengths and weaknesses of
the companies after detail analysis.
Bibliography: Refer to page No.9 of the proposal.
Annexes: Financial statements of the Companies will be
annexed with the Project in soft form either in Scanned
or PDF form.

METHODOLOGY
Data Collection Sources
The data will be obtained through both primary and secondary
sources .Major data shall be collected from the published
financial statements available in Pakistan Stock Exchange or
Company registered office. The financial data of these banks
shall be attained from their websites using internet. The links are
as given as under:
www.abl.com.pk
www.hbl.com.pk

Data Collection Tools/Instruments

Data will be collected using following methods, according to the
requirement of the project:

Interview from employees of the banks for their

views
Gathering observations
Data Processing & Analysis
Following tools will be used to process the data because the
nature of this study is both quantitative and descriptive:

M.S. Excel i.e. Spreadsheet software

Simple statistical analysis tools

Section II
Where is introduction about student??????
BIBLIOGRAPHY
I will use APA format for referencing as available on the website of
VULMS downloads portion and STA- 630 last lecture as under.
You are required to provide all references which you explored
and used at proposal stage. These must be in APA style
S.B.P. (2015), Credit Risk Analysis
Websites of Banks

Bibliography references must be in APA style. For this

section, explore the download section where relevant file
of APA guidelines is available for your better guidance.
Secondly, must watch the video lecture no.45 of research
methods (STA-630) for this which is beneficial for you.
General Rules for an APA Referencing
Order of entries: List all references in alphabetical order. Each reference
is listed only once.
Authors: List the author's last name, followed by a comma and initials
separated by periods and spaces. When listing two to six authors, place
commas between them and use an ampersand (&) before the last author's
name. If the number of authors exceeds six, list the first six followed by "et
al." (see the Senden example). For edited books with chapters written by
individual authors, list the authors of the chapter first, then the year, and the
chapter title, followed by "In", the editors' names, then (Eds.), and the book
title (see the Phillips example).
Date: The year goes after the authors, in parentheses and followed by a
period, for example (2003). If no year is identified, use (n.d.).
Title: Capitalize the first letter of the first word in the title, and the first
word in the subtitle. The rest of the title is in lower-case, with the exception
of proper names. The title is italicized or underlined.

Book references: Give the title, edition, city of publication, and

publisher. If there is an edition it appears after the title, abbreviated, in
parentheses, and followed by a period, for example (3rd ed.).

 Journal references: Give the journal title written in full, a comma,

volume number [all italicized or underlined], issue number in parentheses if
available, comma, and the page range, followed by a period. For example:
Journal of Nuclear Medicine, 38(10), 1327-33.
Pages: For journal articles, give the entire page range of an article, not
the specific page on which the information was found. For books, no page
numbers are given, with two exceptions: the page number of a dictionary
entry is included as well as the page range of a chapter with its own author
in an edited book.
For Online website (Annual Reports or Financial Statements Reference)
Investor Relations. (n.d.). Retrieved from Glaxo Smith Pakistan:
http://www.gsk.com.pk/83/Investor-Relations.aspx

Journal article, personal author(s):

Senden, T. J., Moock, K. H., Gerald, J. F., Burch, W. M., Bowitt, R. J., Ling, C. D., et al. (1997).
The physical and chemical nature of technigas. Journal of Nuclear Medicine, 38(10), 1327-33.
Journal article, organization as author:
The Cardiac Society of Australia and New Zealand. (1986). Clinical exercise testing. Safety and
performance guidelines. Medical Journal of Australia, 164, 282-4.
Book, personal author(s):
Ringsven, M. K., & Bond, D. (1996). Gerontology and leadership skills for nurses. (2nd ed.).
Albany (NY): Delmar.
Book or pamphlet, organization as author and publisher:
College of Medical Laboratory Technologists of Ontario. (1995). The registration process.
Toronto: Author.
Book, editor(s):
Berkow, R., & Fletcher, A. J. (Ed.). (1992). The Merck manual of diagnosis and therapy. (16th
ed.). Rahway (NJ): Merck Research Laboratories.
Book, editor(s); chapter has own author:
Phillips, S. J., Whisnant, J. (1995). Hypertension and stroke. In J. H. Laragh, & B. Brenner
(Eds.), Hypertension: pathophysiology, diagnosis, and management (pp. 465-78). New York:
Raven Press.
Dictionary entry:
Saunders. (1997). Dorland's illustrated medical dictionary. (28th ed.). Philadelphia.

Newspaper article:
Lee, G. (1996, June 21). Hospitalizations tied to ozone pollution: Study estimates 50,000
admissions annually. The Washington Post;Sect. A:3 (col. 5).
Legal material:
Regulated Health Professions Act, 1991, Stat. Of Ontario, 1991 Ch.18, as amended by 1993,
Ch.37: office consolidation. (Queen's Printer for Ontario 1994).
Electronic journal article:
Borman, W. C., Hanson, M. A., Oppler, S. H., Pulakos, E. D., & White, L. A. (1993). Role of
early supervisory experience in supervisor performance. Journal of Applied Psychology, 78, 443449. Retrieved October 23, 2000, from PsycARTICLES database.
Document available on a web page:
Chou, L., McClintock, R., Moretti, F., Nix, D. H. (1993). Technology and education: New wine
in new bottles: Choosing pasts and imagining educational futures. Retrieved August 24, 2000,
from Columbia University, Institute for Learning Technologies Web site:
http://www.ilt.columbia.edu/publications/papers/newwine1.html
Monograph in electronic format:
Reeves, J. R. T., & Maibach, H. (1995). CDI, clinical dermatology illustrated. (2nd ed.) [CDROM]. San Diego: CMEA Multimedia Group.

Introduction of the student

Last degree obtained: BA
Organization's Name Where Currently Employed: Hussein Sugar Mills
Limited
Designation: Accounts officer
Experience: 8 year