Using the formulas developed in this chapter and in Chapter 6 and the information that follows, calculate the ratios of total capital to total assets for the banking firms listed below. What relationship among these banks’ return on assets, return on equity capital, and capital-to-assets ratios did you observe? What implications or recommendations would you draw for the management of each of theseinstitutions?
Answer to relevant QuestionsOver the Hill Savings has been told by examiners that it needs to raise an additional $8 million in long-term capital. Its outstanding common equity shares total 5.4 million, each bearing a par value of $1. This thrift ...What are some warning signs to management that a problem loan may be developing?Suppose a business borrower projects that it will experience net profits of $2.1 million, compared to $2.7 million the previous year, and will record depreciation and other noncash expenses of $0.7 million this year versus ...Under which of the six Cs of credit discussed in this chapter does each of the following pieces of information belong?The particular C of credit represented by each piece of information presented in this problem was as ...What is cash-flow analysis, and what can it tell us about a business borrower’s financial condition and prospects?
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