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PROBLEM ANALYSIS: PROFITABILITY RATIOS Bank A has net profit after taxes of $2.4 million and the following balance sheet: Reserves Loans Securities Assets 10 60
PROBLEM ANALYSIS: PROFITABILITY RATIOS Bank A has net profit after taxes of $2.4 million and the following balance sheet: Reserves Loans Securities Assets 10 60 40 Balance Sheet (million) Liabilities and Capital Deposits 70 Borrowings 10 Bank Capita 30 On the other hand, bank B has net profit after taxes of $3.1 million and the following balance sheet: Balance Sheet (million) Assets Liabilities and Capital Reserves 20 Deposits 80 Loans 40 Borrowings 15 Securities 60 Bank Capita 25 For each bank, compute the following: 1. ROA; 2. ROE; 3. Leverage ratio
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