FORMULAS: Net Interest Margin-Interest revenues Interest expenses) Assets Gap-Rate sensitive assets - Rate sensitive liabilities Gap Ratio = (Rate sensitive assets/Rate sensitive liabilities) ROA - (Net profit after taxes Assets ROE (Net profit after taxes)/Equity; ROE=ROA X leverage measure [(Net income) Equity capital) = (Net income)/Total assets] x [Total assets/Equity capital] DURGAP-DURAS - [DURLIAB X (LIAB/AS)] *** A bank that relies on short-term deposits, and expects consistently decreasing interest rates, should allocate most of its funds to loans and securities, with rates in order to increase overall profitability, long-term: fixed short-term: fixed long-term: variable short-term; variable