Fin571 Week 3 Assessment

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University of Phoenix *

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FIN571

Subject

Finance

Date

Apr 3, 2024

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docx

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3

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1 University of Phoenix FIN/571: Corporate Finance Instructor: James Traylor Kimberley Mason January 29 th , 2024 Comparison of Income Statement for Capital One FY23 vs FY 22
2 Comparison of Balance Sheet for Capital One for FY23 vs FY22 To fully analyze Capital One financial statements for the financial years ending in 2022 and 2023, it is imperative to take into consideration the financial and economic conditions which plagued the market/economy at that time. During 2022 and 2023, the Federal Reserve Bank of the United States conducted monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. The Federal Reserve raised interest rates at its fastest pace in four decades, to minimize inflationary pressures in the economy. According to a report by the  Federal Reserve Board of Governors , the banking system was challenged in 2023 by the effects of rising interest rates on the cost of deposits and other funding, causing costs to rise, and the fair value of investments in fixed-rate securities, causing the value to decline. As shown in the income statement above, the financial year ending 2023 Capital One Net Income available to common stockholders fell 35%,
3 which can be partially attributed to higher expenses and higher cost of lending because of higher interest rates. References Capital One Financial Corporation Financial Supplement . (n.d.). Retrieved from www.capitalone.com: https://investor.capitalone.com/static-files/8a80ba03-7011-486a- a794-440b169ccbd8 Monetary Policy and Economic Developments . (n.d.). Retrieved from www.federalreserve.gov: https://www.federalreserve.gov/publications/2022-ar-monetary-policy.htm
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