In this paper, we construct an aggregate financial soundness indicator (AFSI) based on the traditional FSIs in the spirit of Cheang and Choy (2009). The AFSI is an equally weighted average of its sub-indices derived from capital adequacy, asset quality, management efficiency, earnings, and liquidity. The decomposition of the AFSI helped in revealing its stylized facts, which replicates well developments of Ghana’s banking sector. The AFSI therefore provides a more powerful and faster tool in judging the overall state of soundness of the banking sector in Ghana.