SPECIFIC CRITERIA FOR MEASURING
BANK PERFORMANCE QUESTIONS
WITH COMPLETE ANSWERS
cost ssof ssgoods sssold ss- ssAnswer ssthe ssamount ssof ssmoney ssthe sscompany ssspent
ssto ssmanufacture ssor ssproduce ssthe ssgoods ssor ssservices ssit sssells
income ssstatement ss- ssAnswer ssa ssfinancial ssstatement ssprepared ssregularly ssby ssa
ssbusiness ssthat sslists ssits sssales ssor ssrevenue, sscost ssof ssgoods sssold, ssoperating
ssexpenses, ssand ssnet ssincome; ssthe ssstatement ssprovides ssa sssnapshot ssof ssa
ssbusiness' ssfinancial ssstrength ssand ssprofitability
foreclosure ss- ssAnswer ssa ssprocess ssbanks ssor sslending ssinstitutions ssresort ssto
sswhen ssthe ssborrower ssdefaults sson ssa ssloan ssresulting ssin ssthe sslender ssobtaining
ssownership ssof ssa ssborrower's ssasset ssthat sswas ssoriginally ssoffered ssas sscollateral
operating ssexpenses ss- ssAnswer ssadditional sscost ssincurred ssby ssa ssbusiness ssto
ssrender ssits ssservices ssor sssales ssits ssgoods; ssmay ssinclude ssitems sssuch ssas:
sssalaries ssand sswages, ssinterest ssif ssloans, ssrent, sstaxes
operating ssincome ss- ssAnswer ssthe ssdifference ssbetween sssales ssor ssrevenue ssminus
sscost ssof ssgoods sssold ssminus ssoperating ssexpenses ssbut ssbefore sstaxes
In ss2013, ssthe ssbank ssoperations ssresulted ssin ssa ssprofit, ssbut ssin ss2014, ssthe ssbank
ssoperations ssresulted ssin ssa ssloss. ss- ssAnswer ssIn ss2013, ssa ssbank's ssoperating
ssincome sswas ss$4,000,000 ssand ssthe ssoperating ssexpenses sswere ss$3,700,000. ssIn
ss2014, ssthe ssoperating ssincome ssincreased ssby ss10% ssand ssthe ssoperating
ssexpenses ssincreased ssby ss20%. ssWhat ssis ssthe ssresult ssof ssthese sschanges?
net ssincome ss- ssAnswer ssThe ssremainder ssafter sssubtracting ssoperating ssexpenses
ssfrom ssoperating ssincome ssis sscalled ss__.
a ssdirect ssrelationship ssfor ssboth ssoperating ssincome ssand ssoperating ssexpenses ss-
ssAnswer ssWhat ssis ssthe ssrelationship sson ssa ssbank's ssoperating ssincome ssand
ssoperating ssexpenses sswhen ssinterest ssrates ssrise?
operating ssincome ss- ssAnswer ssThe sstotal ssof ssall sssales ssis sscalled ss__.
profitability ss- ssAnswer ssThe sscapacity ssto ssearn ssmoney ssis sscalled ss_.
BANK PERFORMANCE QUESTIONS
WITH COMPLETE ANSWERS
cost ssof ssgoods sssold ss- ssAnswer ssthe ssamount ssof ssmoney ssthe sscompany ssspent
ssto ssmanufacture ssor ssproduce ssthe ssgoods ssor ssservices ssit sssells
income ssstatement ss- ssAnswer ssa ssfinancial ssstatement ssprepared ssregularly ssby ssa
ssbusiness ssthat sslists ssits sssales ssor ssrevenue, sscost ssof ssgoods sssold, ssoperating
ssexpenses, ssand ssnet ssincome; ssthe ssstatement ssprovides ssa sssnapshot ssof ssa
ssbusiness' ssfinancial ssstrength ssand ssprofitability
foreclosure ss- ssAnswer ssa ssprocess ssbanks ssor sslending ssinstitutions ssresort ssto
sswhen ssthe ssborrower ssdefaults sson ssa ssloan ssresulting ssin ssthe sslender ssobtaining
ssownership ssof ssa ssborrower's ssasset ssthat sswas ssoriginally ssoffered ssas sscollateral
operating ssexpenses ss- ssAnswer ssadditional sscost ssincurred ssby ssa ssbusiness ssto
ssrender ssits ssservices ssor sssales ssits ssgoods; ssmay ssinclude ssitems sssuch ssas:
sssalaries ssand sswages, ssinterest ssif ssloans, ssrent, sstaxes
operating ssincome ss- ssAnswer ssthe ssdifference ssbetween sssales ssor ssrevenue ssminus
sscost ssof ssgoods sssold ssminus ssoperating ssexpenses ssbut ssbefore sstaxes
In ss2013, ssthe ssbank ssoperations ssresulted ssin ssa ssprofit, ssbut ssin ss2014, ssthe ssbank
ssoperations ssresulted ssin ssa ssloss. ss- ssAnswer ssIn ss2013, ssa ssbank's ssoperating
ssincome sswas ss$4,000,000 ssand ssthe ssoperating ssexpenses sswere ss$3,700,000. ssIn
ss2014, ssthe ssoperating ssincome ssincreased ssby ss10% ssand ssthe ssoperating
ssexpenses ssincreased ssby ss20%. ssWhat ssis ssthe ssresult ssof ssthese sschanges?
net ssincome ss- ssAnswer ssThe ssremainder ssafter sssubtracting ssoperating ssexpenses
ssfrom ssoperating ssincome ssis sscalled ss__.
a ssdirect ssrelationship ssfor ssboth ssoperating ssincome ssand ssoperating ssexpenses ss-
ssAnswer ssWhat ssis ssthe ssrelationship sson ssa ssbank's ssoperating ssincome ssand
ssoperating ssexpenses sswhen ssinterest ssrates ssrise?
operating ssincome ss- ssAnswer ssThe sstotal ssof ssall sssales ssis sscalled ss__.
profitability ss- ssAnswer ssThe sscapacity ssto ssearn ssmoney ssis sscalled ss_.
