The ratios below measure the different aspects of risk the bank faces. Bank A Bank B...
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The ratios below measure the different aspects of risk the bank faces. Bank A Bank B 20% 80% Interest income to total income ratio Long term debt to equity ratio Capital adequacy ratio Non-performing (b) loans to total loans ratio 3.0x 12% 1% 2.5x 10% 1.5% For each of the ratios above, briefly discuss what the ratio measures and the type of risk it represents. Based on the ratios, discuss which is the riskier bank. The ratios below measure the different aspects of risk the bank faces. Bank A Bank B 20% 80% Interest income to total income ratio Long term debt to equity ratio Capital adequacy ratio Non-performing (b) loans to total loans ratio 3.0x 12% 1% 2.5x 10% 1.5% For each of the ratios above, briefly discuss what the ratio measures and the type of risk it represents. Based on the ratios, discuss which is the riskier bank.
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Answer rating: 100% (QA)
Interest income to total income ratio This ratio measures the proportion of a banks income generated from interest compared to its total income A high... View the full answer
Related Book For
Accounting
ISBN: 978-0132690089
9th Canadian Edition volume 2
Authors: Charles T. Horngren, Walter T. Harrison Jr., Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood
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