[Solution] FIN 564 Week 3 Homework Assignment – Financial statements

  • Chapter 12 Problem 6:
  1. The financial statements for THE Bank are shown below:………
  2. Calculate.THE Bank’s earning assets.
  3. Calculate-THE Bank’s ROA
  4. Calculate THE Bank’s total operating income
  5. Calculate THE Bank’s spread
  • Chapter 12 Problem 8 – Megalopolis Bank has the following balance sheet and income statement….
  1. Return on equity
  2. Return on assets
  3. Asset utilization
  4. Equity multiplier
  5. Profit margin
  6. Interest expense ratio
  7. Provision for loan loss ratio
  8. Noninterest expense ratio
  9. Tax ratioChapter 12 Problem 9 – Anytown bank has the following ratios:
  • Chapter 13 Problem 2 – Two depository institutions have composite CAMELS ratings of 1 or 2 and are “well capitalized.” Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings:
  • Chapter 13 Problem 10 – What is the contribution to the asset base of the following items under the Basel requirements? Under the U.S. capital-to-assets rule?

SOLUTION  

Chapter 12:

#6

A. Earning Assets:                     $8,700.00

B. ROA:              0.049765258

C. Operating Income:     $570.00

D. Bank’s Spread:    0.019761806

#8  
  A.   Return on equity 17.86%
  B.   Return on assets 2.73%
  C.   Asset utilization 10.93%
  D.   Equity multiplier 6.536
  E.    Profit margin 0.25
  F.    Interest expense ratio 6.01%
  G.   Provision for loan loss ratio 1.09%
  H.   Noninterest expense ratio 0.55%
  I.   Tax ratio 1.64%

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