The presented report continues to deepen the contradiction between the reported net profit and the liquidity of the balance sheet.
This is not surprising due to the growth in the volume of loans issued.
Liquidity can be expressed using a coefficient, which is explained below.
Liquidity coefficient = 1 – loans issued / balance sheet
Now it looks like this.
Net profit. As it is.
Then we have to describe the cash flow and the equity adequacy.
The adequacy of equity, as you can see, has been declining for 9 years along with the loans issued.
It is quite natural that the cash flow from operations grows along with the growth in the volume of loans.
So we have the growing income together with the growing risks.
This should now be converted into an estimate.
Using simple logic, the money that the company could extract from this process could look like this in these formulas.
Free cash flow = FCF = CF*equity adequacy.
Free cash flow = FCF=Net Profit * (1 – loans issued / balance sheet)
Next, we will show this on the graph by dividing it by the number of shares and comparing it with the dividends paid.
Figure 6 and 7.
The last digits in the lines of these graphs are represented by the measurement of the year.
Thus, we have an estimate of the bank's share in its equilibrium state.