A security analyst calculates the following ratios for two banks. How should the analyst evaluate the financial health of the two banks?

Bank A Bank B Return on equity 22% 24%
Return on assets 2% 1.5%
Equity multiplier 11× 16×
Profit margin 15% 14%
Asset utilization 13% 11%
Spread 3% 3%
Interest expense ratio 35% 40%
Provision for loan-loss ratio 1% 4%.

AppendixLO1