Is there a difference between the interpretation for the five-firm concentration ratio calculated using total assets, deposits and loan advances?
Total deposits from 2018-2020=$19045008
5 firm concentration ratio= (total volume share of five largest share firms/total volume in the market)*100
5 firm concentration ratio= ($18800388)/($19045008)*100=98.72%.
Therefore it shows high concentrations.
Total deposits from 2018-2020=$56637414
5 firm concentration ratio= (total volume share of five largest share firms/total volume in the market)*100
5 firm concentration ratio= ($56637414)/($56637414)*100=100%.
Therefore it shows full or high concentrations.
2018
Total industry assets = STANBIC + BARCLAYS = 6,205,018 + 8,994,562 = 15,199,580
Concentration of STANBIC = 6,205,018 / 15,199,580 = 0.408236 = 0.41 = 41%
Concentration of BARCLAYS = 8,994,562 / 15,199,580 = 0.591764 = 0.59 = 59%
2019
Total industry assets = STANBIC + ASBA = 9,295,682 + 11,772,546 = 21,068,228
Concentration of STANBIC = 9,295,682 / 21,068,228 = 0.441218 = 0.44 = 44%
Concentration of ASBA = 11,772,546 / 21,068,228 = 0.558782 = 0.56 = 56%
2020
Total industry assets = STANBIC + ASBA =12,742,132 + 12,546,473 = 25,288,605
Concentration of STANBIC = 12,742,132 / 25,288,605 = 0.503869 = 0.50 = 50%
Concentration of ASBA = 12,546,473 / 25,288,605 =0.496131= 0.50 = 50%
Question:
Is there a difference between the interpretation for the five-firm
concentration ratio calculated using total assets, deposits and loan
advances?
Concentration ratio is used by the company to determine the share of the company in the market and how much a company contributes towards the overall industry or to the company.
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