The following financial information (in millions) is for two major corporations for three fiscal years ended October 31: 

Instructions 

a. Calculate return on assets and return on equity for each company for 2020 and 2019. Comment on whether their ratios have improved or deteriorated.

b. Compare Toronto-Dominion Bank’s ratios with Bank of Nova Scotia’s. 

c. The industry average for return on equity for 2020 and 2019 was 9.18% and 9.59%, respectively. Compare the two companies’ performance with the industry average. 

Using your findings in this question to illustrate, explain why it is important to use comparisons in evaluating ratios.  

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The Toronto-Dominion Bank Profit for the year Shareholders' equity Total assets The Bank of Nova Scotia Profit for the year Shareholders' equity Total assets 2020 $ 11,895 95,499 1,715,865 $ 6,778 68,127 1,136,466 2019 $ 11,686 87,701 1,415,290 $ 8,390 67,522 1,086,161 2018 $ 11,334 79,047 1,334,903 $ 8,548 65,228 998,493