This study is designed to analyze the relationship between the balance sheet componentsrnand profitabilit1j of Ethiopian Commercial Banks for the period 2001 to 2010. In order to rncarry out the study, balanced panel data comprising a sample of 80 observations from thernbalance sheets and the profit and loss accounts of 8 Commercial Banks were gathered.rnTwo of them are public while the rest are private Banks. The relationship betweenrnprofitabilit1j and Asset Liabilit1j Management (ALM) was tested using the StatisticalrnCost Accounting (SCA) model. Two measures of profitabilit1j were used to signify thernrelationship between profitabilit1j and ALM. Those are Total Income and Net Income.rnThe results of the analysis showed that public Banks balance sheet components of Loansrnand Advances, Saving Deposits, and external factors -GOP growth rate and Marketrnconcentration significantly affect their total income, while net income of public Banks isrnsignificantly affected by Balance Sheet Unrelated Items, Loans and Advances, SavingrnDeposits, Inflation ,GDP growth rate and Market concentration. Private Banks' totalrnincome is found to be significantly affected by Balance Sheet Unrelated Items, Placingsrnwith other banks, Sum of Investments, Fixed Deposits and Other Liabilities, and their netrnincome is impacted by Off-Balance Sheet Items, Saving Deposits, Fixed (Time Deposits,rnOther Liabilities and external factors. Consequently, Bank managers are advised to payrnattention to these items in their profit planning in order to enhance their performance.