Analysis of JP Morgan Chase and Co. Financial Statements

FINANCE
JP MORGAN CHASE AND COMPANY

Contents
Introduction................................................................................................................................2
Background of the company......................................................................................................2
Part a- Recent Financial Developments and Impact on the company........................................3
Part b- Analysis of international financial management strategies............................................4
Part c- Analysis of financial statements.....................................................................................4
Conclusion..................................................................................................................................9
References................................................................................................................................10
Appendix..................................................................................................................................11

Introduction
The business operations of the global business enterprises are highly affected by the
international financial developments, resulting in the political and economic changes in the
business environment. The increasing complexities in the global business environment,
numerous corporate collapses and the enhanced number of transactions beyond the borders
have called a greater attention on transparent presentation of the business activities in the
interests of the various stakeholder groups including the shareholders of the entities. Hence,
the success in dynamic business environment of today can be highly attributed to the analysis
of the financial statements of the enterprises to get the useful insights about the business
operations and the financial health (Higgins, 2012).
The following report is aimed at evaluating the various aspects of the business
operations and financial statement of one of the most popular global organisation JP Morgan
Chase and Co. The said analysis would include the study of impact of the international
financial developments on the business operations of JP Morgan Chase and Co. Further, the
financial statements would be studied with the aid of the computation of the key financial
ratios over the period of two years. The ratios would be further compared to understand the
progresses in the business activities.
Background of the company
The roots of the company JPMorgan Chase & Co. can be traced back to the year 1799
in the New York City where the company’s present headquarters are located. The present
firm is built on the foundation of a number of heritage firms namely the Chase Manhattan
Bank, J.P. Morgan & Co., First National Bank of Chicago, Bank One, The Bear Stearns
Companies Inc., Robert Fleming Holdings, Manufacturers Hanover Trust Co., Chemical
Bank, The National Bank of Detroit and others (JP Morgan Chase and Co., 2019a). The
present company was formed in the year 2000 resulting out of the merger between Chase
Manhattan Corporation and the J.P. Morgan & Co. and hence the present name of the
company. The chief business operations of the company include the provision of the
commercial banking, investment banking, private banking, asset management services,
wealth management and brokerage services, securities services and the treasury services
(JPMorgan Chase and Co. 2019b). The company is listed on the New York Stock Exchange.

Part a- Recent Financial Developments and Impact on the company
The two key and recent developments in the international financial market that have
created disruptions in the global markets are the Brexit and the US China Trade War. The
impact of the same on the business of the entity JPMorgan Chase & Co. has been explained
one by one.
The Brexit an abbreviation for “British exit,” which refers to the decision of the UK o
leave the European Union (EU) on June 23, 2016 in a referendum. The said decision caused
the global market disruption including the financial markets with the British Pound falling to
its lowest ever in the last 30 years, against the Dollar. The resulting impact at a general level
is the disruption of the trade agreements between the UK and the EU. In terms of the
business of the entity JPMorgan Chase & Co. the company faced the heat of the uncertainty
of the Brexit throughout the year as stated in the annual report of the company. The entity
has established a Firm wide Brexit Implementation program in the year 2017 for the effective
implementation of the strategies across the worldwide businesses and the functions
(JPMorgan Chase and Co., 2019c). The program is aimed at ongoing assessment of political,
legal and regulatory risk in the business environment. It is significant to note that the
company has planned a withdrawal from the business from the region of UK, if a “no deal
scenario” situation has reached. Under a no deal scenario, the impact of the Brexit in the
upcoming future would be that the company would be leveraging its EU legal entities in
order to ensure the continuation of services to the EU clients (Arnold, 2019). The company
already has banking licenses in Frankfurt, Dublin and Luxembourg. In order to serve the EU
clients as stated above, the company will have to recruit several additional number of
employees in its various EU locations and will be further required to relocate employees from
the UK to the EU.
Another key development in the international financial sector that has left a great
impact on the business operations of various entities irrespective of the industry across the
globe, is the US- China Trade War. The research division of the entity namely the JPMorgan
Research has already axed its GDP forecast for the year 2019 and 2020 to 6.3% and 6.1%
respectively in the China region (JPMorgan Chase and Co, 2019d). The prolonged US China
trade talks have led to the company JPMorgan Chase and Co. predicting the escalated tariffs
to be in place till the year 2020 (Curran & Anstey, 2019). As a result of the said prediction a