Question
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: Bank Balance Sheet (in millions) Assets Liabilities and Capital Reserves $5 Deposits $100 Loans $65 Borrowings $10 Securities $50 Bank Capital $10 Instructions: Enter your responses rounded to two decimal places. 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 $0.9 million and the following balance sheet: Bank Balance Sheet (in millions) Assets Liabilities and Capital Reserves $7.5 Deposits $75 Loans $55 Borrowings $3 Securities $23.5 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 B:
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