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?

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Name of Bank Net Income ÷ Total Assets Net Income ÷ Total Equity Capital (or ROE) (or ROA) 1.25% 1590 First National Bank of Hopkins Safety National Bank Iisher State Bank Mercantile Bank and Trust 0.25% Company Lakeside National Trust 1.2% 13% 11% 390 0.9% -0.5%