Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio. a. Bank A has net profit after taxes of $1.8 million and the following balance sheet: The return on assets (ROA) for Bank A: ___% The return on equity (ROE) for Bank A: ___% The leverage ratio for Bank A: ___ Bank B has net profit after taxes of $1 million and the following balance sheet: Instructions: Enter your responses rounded to two decimal places.) The return on assets (ROA) for Bank B: ___% The return on equity (ROE) for Bank B: ___% The leverage ratio for Bank B: ___
Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio. a. Bank A has net profit after taxes of $1.8 million and the following balance sheet: The return on assets (ROA) for Bank A: ___% The return on equity (ROE) for Bank A: ___% The leverage ratio for Bank A: ___ Bank B has net profit after taxes of $1 million and the following balance sheet: Instructions: Enter your responses rounded to two decimal places.) The return on assets (ROA) for Bank B: ___% The return on equity (ROE) for Bank B: ___% The leverage ratio for Bank B: ___
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio.
a. Bank A has net profit after taxes of $1.8 million and the following
The return on assets (ROA) for Bank A: ___%
The return on equity (ROE) for Bank A: ___%
The leverage ratio for Bank A: ___
Bank B has net profit after taxes of $1 million and the following balance sheet:
Instructions: Enter your responses rounded to two decimal places.)
The return on assets (ROA) for Bank B: ___%
The return on equity (ROE) for Bank B: ___%
The leverage ratio for Bank B: ___
Transcribed Image Text:Reserves
Loans
Securities
Assets
Bank Balance Sheet
(in millions)
$8
$50
$22
Liabilities and Capital
$80
$2
$8
Deposits
Borrowings
Bank Capital
Transcribed Image Text:Reserves
Loans
Securities
Assets
Bank Balance Sheet
(in millions)
$5
$45
$45
Liabilities and Capital
$75
$10
$10
Deposits
Borrowings
Bank Capital
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