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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.
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 Assets Reserves Loans Securities Bank Balance Sheet (in millions) Liabilities and Capital $5 Deposits $75 $45 Borrowings $10 $45 Bank Capital $10 The return on assets (ROA) for Bank A: percent The return on equity (ROE) for Bank A: percent The leverage ratio for Bank A: b. Bank B has net profit after taxes of $1 million and the following balance sheet Bank Balance Sheet (in millions) Assets Liabilities and Capital Reserves $8 Deposits $80 Loans $50 Borrowings $2 Securities $22 Bank Capital $8 Instructions: Enter your responses rounded to two decimal places. The return on assets (ROA) for Bank B: percent The return on equity (ROE) for Bank B: percent The leverage ratio for Bank 8
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