S. No.	Financial Ratio	Description	Formula
1.	Current Ratio	The current ratio is a liquidity ratio that evaluates a bank’s capacity to pay short-term and long-term obligations. A ratio below 1 show that bank’s liabilities are greater than its assets and suggest that the bank not able to pay off its obligations.	Current Ratio = Current Assets/Current Liabilities
2.	Quick Ratio	The quick ratio is also a liquidity ratio that represents the bank’s short-term liquidity. It evaluates the bank’s ability to meet its short-term obligations with its most liquid assets.	Quick Ratio = (Cash + accounts receivables + marketable securities)/Total Current Liabilities
3.	Loan to Deposit Ratio	The loan-to-deposit ratio (LTD) is also a commonly used statistic or assessing a bank’s liquidity by dividing the bank’s total loans by its total deposits.	Loans to Deposit Ratio = Loans/Deposits
4.	Return on Assets	Return on assets (ROA) is a profitability ratio that indicates how profitable a bank is relative to its total assets.	Return on assets = Net Income/Total Assets
5.	Return on Equity	Return on equity is commonly used profitability ratio that measures a bank’s profitability by revealing how much profit a bank generates with the money shareholders have invested.	Return on Equity = Net Income/Shareholder’s Equity
6.	Earnings Per Share	Earnings Per Share (EPS) measures the fraction of a bank’s profit allocated to each outstanding share of common stock. EPS acts as an indicator of a bank’s profitability.	Earnings Per Share = (Net Income − Dividends on Preferred Stock)/Average Outstanding Shares
7.	Net Profit Margin	Another measure of profitability ratio is the net profit margin measured by the ratio of net profits to revenues for a bank.	Net Profit Margin = Net Profit/Revenue
8.	Total Asset Turnover Ratio	Asset turnover ratio is the ratio of the value of a bank’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a bank is deploying its assets in generating revenue.	Asset Turnover = Sales or Revenues/Total Assets
9.	Price Earnings Ratio	The price-earnings ratio (P/E ratio) is the ratio for valuing a bank that measures its current share price relative to its per-share earnings. A high P/E suggests that investors are expecting higher earnings growth in the future compared to banks with a lower P/E.	P/E Ratio = Market Value Per Share/Earnings Per Share
10.	Capital Adequacy Ratio	Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities. It is determined by RBI to thwart commercial banks from taking surplus leverage and becoming insolvent.	Capital Adequacy Ratio = (Tier I + Tier II + Tier III (Capital funds)/Risk weighted assets The risk weighted assets take into account credit risk, market risk and operational risk. The Basel III norms stipulated a capital to risk weighted assets of 8%. However, as per RBI norms, Indian scheduled commercial banks are required to maintain a CAR of 9% while Indian public sector banks are emphasized to maintain a CAR of 12%.
11.	Interest Coverage Ratio	Interest coverage ratio can be classified as a Solvency Ratio―which helps to understand if the organization is solvent and whether there are any near threats pertaining to bankruptcy. The interest coverage ratio is a measure of the number of times a bank could make the interest payments on its debt with its earnings before interest and taxes, also known as EBIT. The lower the interest coverage ratio implies the higher the bank’s debt burden and the greater the chance of bankruptcy or default. The higher the interest coverage ratio represents the less the chance of default.	Interest Coverage Ratio = EBIT/Interest Expenses