Abstract:
Financial ratio are ratio of two. selected numerical values taken from an enterprise's financial
statement financial ratios allow for comparisons between companies, between industries,
between different time periods for one company, between a single company and its industry
average. The purpose of ratio analysis is to analyse performance of a company.. The purpose of
ratio analysis is to analyse performance of a company. Financial ratios highlights the importance
of management of organization. Financial ratios should be computed periodically to analyse the
areas of weakness and strength and ratio analysis should be used to measure firm performance of
organization. The project aims to predict the financial performance of banks and industries by
the usage ofmultiple linear regression. The ratio ofReturn on Assets ROA is used for evaluating
the banks’ performance and is considered as the dependent variable for the approach of Multi
Linear Regression. Multiple Linear Regression (MLR) is predictive analysis used to predict a
Return on Assets. We use multiple linear regression to. predict financial ratios such as
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profitability and liquidity ratios. To import and use training data set we use scikit-leam. Scikit leam is a machine learning library for python. Scikit- learn provide^ functionality of regression
both linear and logistic regression .we use linear regression functionality ofscikit-leam to predict
the firm performance. Scikit-leam helps in predicting results. ROA is. analysed by using Scikit
Machine Learning Library. ROA is calculated in order to analyse the -financial performance of a
firm. . The proposed method is tested on data set of National Bank of Pakistan for the time
duration of 2013-2016. Result obtained by the method is the financial health of the bank by
comparing it to the performance of past 5 years. The prediction that is done shows that the
performance of the bank is varying due to some ratios that influence the economic health ofthe
firm
