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Based on the following information about Banks A and B, compute for each the return...

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Finance

Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio.

a. Bank A has net profit after taxes of $1.8 million and the following balance sheet:

Bank Balance Sheet
(in millions)
Assets Liabilities and Capital
Reserves $5 Deposits $100
Loans $70 Borrowings $10
Securities $45 Bank Capital $10

Instructions: Enter your responses rounded to two decimal places.

The return on assets (ROA) for Bank A: percent

The return on equity (ROE) for Bank A: percent

The leverage ratio for Bank A:

b. Bank B has net profit after taxes of $2 million and the following balance sheet:

Bank Balance Sheet
(in millions)
Assets Liabilities and Capital
Reserves $10 Deposits $60
Loans $45 Borrowings $10
Securities $30 Bank Capital $15

Instructions: Enter your responses rounded to two decimal places.

The return on assets (ROA) for Bank B: percent

The return on equity (ROE) for Bank B: percent

The leverage ratio for Bank B:

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