What is return on equity capital, and what aspect of performance is it supposed to measure? Can you see how this performance measure might be useful to the managers of financial firms?
Answer to relevant QuestionsSuppose a bank reports that its net income for the current year is $51 million, its assets total $1,144 million, and its liabilities amount to $926 million. What is its return on equity capital? Is the ROE you have ...Suppose a bank has an ROA of 0.80 percent and an equity multiplier of 12X. What is its ROE? Suppose this bank's ROA falls to 0.60 percent. What size equity multiplier must it have to hold its ROE unchanged?What individuals or groups are likely to be interested in these dimensions of performance for a financial institution?OK State Bank reports total operating revenues of $150 million, with total operating expenses of $125 million, and owes taxes of $5 million. It has total assets of $1.00 billion and total liabilities of $850 million. What is ...What factors have motivated financial institutions to develop funds management techniques in recent years?
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