How financial ratios and performance affect customers in the banking industry in greater London

This study aims to analyze how financial ratios and performance affect customers in the banking industry in greater London. It discusses different types of financial ratios calculated by companies in the banking industry, evaluates the impact of ratio analysis and performance on customer behavior, and explores the usefulness of financial information for customers. The study also examines whether ratio analysis is an effective tool for judging the financial performance of an organization. The results of this research can be valuable for customers making investment decisions and for future researchers in the field.

How the financial ratios and performance
affects the Customers of the banking
industry in the greater London

TABLE OF CONTENTS
Chapter 1 Introduction.....................................................................................................................1
Background of the research.........................................................................................................1
Background of the banking industry in London..........................................................................1
Research Aim & Objectives........................................................................................................2
Significance of the study.............................................................................................................2
References........................................................................................................................................3

Chapter 1 Introduction
Title = How the financial ratios and performance affects the Customers of the banking
industry in the greater London
Background of the research
Financial information is very important for different types of users. These users include
customers, employees, government, suppliers and many other stakeholders. It helps in fulfilling
different types of business goals and objectives (Cadle and et.all., 2010). The information can be
produced in different forms such as reports, budgets, statements, declarations etc. This kind of
data is also very useful for one of the most important stakeholders that are customers. They keep
an interest in it as they want to know how the company is performing, what is its position, what
is the market share etc. The background of this study deals with the behaviour of the customers
in the banking industry (Harrison and Horngren 2007). It makes an attempt to find out it how the
ratios and business performance can affect the decisions of the banking customers.
Background of the banking industry in London
At present the banks in United Kingdom have refined their services. Many of them are
offering similar services. The differentiation can be seen only in terms of different interest rates.
Recently a trend noticed in the industry has been to not to advertise interest rates. It helps the
bank in avoiding to offer such advertised rates at least 60% of their customers. Over the last 40
years the banking system in UK has acknowledged a dramatic shift with total assets increasing
from 100% of GDP to 450% (UK Banking Industry Structure, 2014). It is expected that the
industry will continue to grow in the upcoming future. The sector is dominated by banks such as
Lloyds Group, Barclays, Royal Bank of Scotland and HSBC. The market is clearly of oligopoly
nature because of different categories of business. It is having comparative advantages in the
international banking services. London has been identified as the major centre for the financial
services for the customers. The sector is widely perceived to be dominated by the London. Hence
it can be said that the city is significantly known for banking services (Rasid and et.al., 2011).
1

Research Aim & Objectives
The major aim of the research study is to analyse how the financial ratios and
performance affects the Customers of the banking industry in the greater London. Following
objectives have been framed:
 To discuss different types of financial ratios calculated by the companies in the banking
industry
 To evaluate the impact of Ratio analysis & performance on behaviour of customers in the
banking industry
 To find out how the company’s financial information is useful for the customers in the
banking industry
Research question
To identify whether ratio analysis is an effective tool for judging the financial
performance of an organization or not?
Significance of the study
Every research is carried out with a motive. This research study has been performed to
analyse the behaviour of the customers in the banking industry. Information produced from the
financial statements is very useful for the customers as they are able to take different financial
decisions (Melville, 2008). This research finds out how the ratio analysis can prove to be useful
for the customers. It discovers in what manner it affects their respective investment decisions.
The results of the study can be very useful especially for the people who plans to make
investment in the shares of a particular company. Further it will be beneficial for the other
researchers who wishes to perform research on the same subject.
2

References
Cadle, J. and et.all., 2010. Business Analysis Techniques: 72 Essential Tools for Success BCS,
The Chartered Institute
Harrison, W. T & Horngren C. T, 2007. Financial Accounting, Ed.7, Prentice Hall
Melville, A, 2008. International Financial Reporting, Persons Education Ltd
Moyer, C, McGuigan, J and Rao, R., 2011. Contemporary Financial Management, USA, South-
Western Cengage Learning.
Paramasivan, P., 2009. Financial Management, USA, New Age International.
Rasid, A. Z. S. and et.al., 2011. Management accounting and risk management in Malaysian
financial institutions: An exploratory study. Managerial Auditing Journal. 26(7). pp.566
– 585.
UK Banking Industry Structure, 2014. [Online]. Available through:
<file:///C:/Users/user51/Downloads/2014_UK_Banking_Industry_Structure_Abstract.pdf
>. [Accessed on 14th April 2016].
Yuthas, K.., 2009. Inputting the Environment: Reconsidering the Environmental Information
Matrix. Journal of Information Systems, Managerial Auditing Journal. 26(7). pp.566 –
585.
3