On The Analysis Of Financial Statements Of Commercial Banks

Facing the challenge of entry to WTO and the expedition of bank commercialization, a rehabilitation object has been established in commercial bank in China, which aims at "enhancing capitalization running efficiency, realizing maximum economic profit on the basis of effective management and control over capital venture". However, running and management of modern commercial bank is quite a complicated system engineering. It involves various aspects while all administration must eventually embody profit and be reflected financially. Therefore, financial management is core of commercial bank operation and administration. Strengthening financial management not only consolidates internal administration, but also guards against financial risk, and improves economic profit of commercial bank.Financial management to commercial bank involves roles in the fields of prediction, decision, control, feedback, and analysis, while financial analysis is a key component of it. Financial analysis is the conclusion of various finished financial businesses, the basis of financial prediction and decision, and the grounds of financial control. It functions as a connecting link to other components in financial management circulation. It starts logically with information from financial Statement. Effective financial analysis based on financial statement needs to be carried out under the direction of financial statement analytical theory. For a long time, however, such theory that guides practice in financial management has always been scarce, which bounds the practice of financial analysis and various financial management functions, affecting the realization of rehabilitation objective in commercial bank. This thesis starts with construction of theory frame of financial statement analysis, and then addresses how to execute financial Statement analysis effectively combined with financial statement practice.This thesis is divided into four sections to explain the financial statement analysis in commercial bank.As a summary, the first section begins with the foundation of financial statement analysis, identifies the difference in financial statement analysis between commercial bank and other forms of enterprises. It is shown that financial statement analysis in commercial bank has following characteristics: complex in analysis subject, emphasis on bank financial position, difference in detailed content. The necessity of financial statement analysis in commercial bank is then pointed out, i.e., it helps the financial supervision authority to acknowledge comprehensively. operational information in commercial bank to execute supervising, it also helps related external subject to know financial condition and operational performance in commercial banks and make decisions. In addition, it aids internal managers to apprehend operation position, to identify problems associated with management, to evaluate operation performance, to predict prospect, and to provide the authority with tactics and strategies. At the end of this section, the current situation in financial statement analysis in commercial bank is examined in details. It shows that the goal in financial statement analysis is ambiguous, theories and methods are scarce, even the analysis is effected by the limitation of the financial statement itself. The strong contrast between the importance of the financial statement analysis and limited work done so far in this area indicates the necessarily of this work.The quality of financial statement analysis relies on the validity and detail of information revealed in financial statement. According to the existing of "Accounting System in Financial Business" and "Regulations of Business Financial Accounting Statement", the second section addresses financial statement in commercial bank comprehensively. Financial statement is categorized as internal statement and external statement. The external statement includes three principal sheets (balance sheet, profit sheet, and cash flow) and one complementary sheet (profit distributi...