Financial Statement Analysis Essay
Orrstown Financial Services
In this assignment, we focus on Orrstown Financial Services vs. DNB Financial Corporations. Both institutions have similar financials and sizes of entities. The first part of the assignment is about, studying both institutions and compare them to each other. After that there will be an analysis and general study about the health of ORRF as an overall entity. All data are taken from UBPR reports, 10 k reports, Bloomberg, Yahoo, and Banks main website.
Common Size Net Income Statement
This section of the analysis is about computing common size income statement for both ORRF and …show more content…
According to DNBFC common size balance sheet, both total loans and short-term investments didn’t have as much volatility as ORRF. On the other side, DNBFC used to do worse than ORRF in the retained earnings, which was negative (2006-2011) and then became (1%) in 2012.
Time-Series Regression of percentage change: Net Income Statement
Balance Sheet Statement
Orrstown under or over-perform the industry According to Yahoo! Finance, Orrstown Financial Services, Inc. is categorized under financial sector as a regional bank operating in northeastern United States. Therefore when comparing Orrstown with its industry metrics, we use Yahoo! Finance’s statistics from industry categorized “Regional – Northeast Banks”. Industry Metrics vs. Orrstown Financial Services (As of Sept 11, 2013)
Industry Statistics Market Capitalization: Price / Earnings: Price / Book: Net Profit Margin (mrq): Price To Free Cash Flow (mrq): Return on Equity: Total Debt / Equity: Dividend Yield: 56.8B 16.0 1.78 19.3% 19.3 8.3% NA 2.85% Orrstown Financial Services, Inc. 130.3M NA 1.48 25.29% NA -15.71% NA 0.00
As we can see from the table above, Orrstown’s market capitalization is only 0.23% of the industry’s total market capitalization. Its Price/Book ratio is little a bit lower than the industry average. What is strange here is that with a comparatively high net profit margin as 25.29%, a ratio that is 5.99% higher than