BUSINESS ENVIRONMENT FACTORS THAT AFFECT THE BANKING INDUSTRY Business environment includes the internal and external factors that influence the functioning of a business. Therefore, the business environment is the sum total of the forces or surrounding environment that influence business operations. Internal environmental factors are usually controllable because management has control over them. Whereas external environmental factors are difficult to control by the company. There are two types of external environment: microenvironment and macroenvironment. It is important for every company to perform an environmental analysis that scans the environment so that it can identify its threats and opportunities and improve its planning process.1. Real Estate Market Recovery – According to recent reports, there have been some improvements in the national real estate market this year. The median sales price for existing homes in June 2012 showed an increase of 7.9% over last year according to the National Association of REALTORS (NAR) which reported that the median sales price of homes in York County for August it was $142,000 down from $142,500 in August. 2011 according to a report from the REALTORS Association of York and Adams Counties (RAYAC). There were approximately 349 properties sold in August 2012 compared to 322 sold last year. In August 2012, the median home sales price in Adams County was $162,000 with a total of 73 properties sold compared to 2011 when the median home sales price was $163,000 and 58 properties sold according to the RAYAC2 report. Competitors: The banking and mortgage industries have always been very competitive. (In York County alone, there are 275 banking and lending institutions.) The historically low interest...... middle of paper...... RATIO = Debt/Equity For the year 2012: 324/ 30308=0.01For the year 2013: 370/37127=9.9Interpretation:It is a financial leverage ratio, which indicates a relationship between debt and equity. The ratio indicates the total liabilities of the company and the total equity, both data are present in the company's balance sheet. The lower the ratio, the better. The higher the ratio, the higher the risk. The ideal ratio is 1:1. In the year 2012, HDFC bank ratio is 0.01. This means the company is less reliant on outsiders and loans. This is a good indicator, meaning that the company was doing well in the last year. But in 2013 the ratio increased dramatically. In 2013 the ratio was 9.9, which means that the bank borrowed a lot of money from outsiders. Tip:•