Question
Dudley Bank has the following balance sheet and income statement.
Balance Sheet (in millions) Assets Liabilities and Equity Cash and due Demand from banks $ 7,500 deposits $ 15,500 Repurchase page 412
Income Statement
Interest on fees and loans $6,715
Interest on repurchase agreements 143
Interest on other investment securities 1,705
Interest on deposits in banks    60
Total interest income $8,623
Interest on deposits 3,018
Interest on debentures  1,140
Total interest expense $4,158
Net interest income $4,465
Provision for loan losses 200
Noninterest income. 950
Noninterest expenses  1,720
Income before taxes $3,495
Taxes  1,220
Net income 2275. For Dudley Bank, calculate:
Return on equity
Return on assets
Asset utilization
Equity multiplier
Profit margin
Interest expense ratio
Provision for loan loss ratio
Noninterest expense ratio
Tax ratio
0 0
Add a comment Improve this question Transcribed image text
Answer #1
In case of Dudley Bank
1-Return on Equity = Net Income *100 = 2275 *100 = 15.04%
Shareholder's Equity 15125
(Common Stock+Paid up Capital+Retained Earnings)
2-Return on Assets = Net Income *100 = 2275 *100 = 1.65%
Average Total Assets 137500
(Since opening total assets details are not given therefore taking closing total assets)
3-Asset Utilization = Total Sales/Interest *100 = 8623 *100 = 6.27%
(Fixed Asset Turnover Ratio) Total Assets 137500
4-Equity Multiplier = Total Assets = 137500 = 9.090909
Shareholder's Equity 15125
5-Profit Margin = Net Income *100 = 2275 *100 = 26.38%
Total Sales/Interest 8623
6-Interest Expense Ratio = Interest Expense *100 = 3018+1140 *100 = 48.22%
Total Sales/Interest 8623
7-Provison for loan loss Ratio = Provisio for loan loss *100 = 200 *100 = 2.32%
Total Sales/Interest 8623
8-Non Inerest Expense Ratio = Non Interest Expense *100 = 1720 *100 = 19.95%
Total Sales/Interest 8623
9-Tax Ratio = Tax Expense *100 = 1220 *100 = 34.91%
Taxable Income 3495
Add a comment
Know the answer?
Add Answer to:
Dudley Bank has the following balance sheet and income statement. page 412 Income Statement Interest on...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Megalopolis Bank has the following balance sheet and income statement.    For Megalopolis, calculate: Return on...

    Megalopolis Bank has the following balance sheet and income statement.    For Megalopolis, calculate: Return on equity Return on assets Asset utilization Equity multiplier Profit margin Interest expense ratio Provision for loan loss ratio Noninterest expense ratio Tax ratio Balance Sheet (in millions) Assets Liabilities and Equity Cash and due Demand from banks $ 9,000 deposits $ 19,000 Investment securities 23,000 NOW accounts 89,000 Repurchase agreements 42,000 Retail CDs 28,000 Loans 90,000 Debentures 19,000 Fixed assets 15,000 Total liabilities $155,000...

  • Megalopolis Bank has the following balance sheet and income statement Assets Cash and due from banks...

    Megalopolis Bank has the following balance sheet and income statement Assets Cash and due from banks Investment securities Repurchase agreements Loans Fixed assets Other assets Balance Sheet (in millions) Liabilities and Equity $ 10,000 Demand deposits 33,000 NOW accounts 52,000 Retail CDs 100.000 Debentures 25,000 Total liabilities 5,000 Common stock Paid-in capital Retained earnings $225,000 Total liabilities and equity $ 29,000 99,000 38.000 29,000 $195,000 12,000 4,000 14,000 $225,000 Total assets Income Statement Interest on fees and loans Interest on...

  • Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on...

    Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Rate Earned () Rate Paid (s) Balance Sheet (in thousands) Assets Cash and due from banks $ 6,000 Investment securities 22,000 Repurchase agreements 12,000 Loans less allowance for losses 80,000 Fixed assets 10,000 Other earning assets 4,000 Total assets $134,000 Liabilities and Equity Demand deposits $ 9,000 NOW accounts 69,000 Retail CDs 18,000 Subordinated debentures 14,000 Total liabilities 110,000 Common stock 10,000...

  • Preview File Edit View Go Tools Window M 14%D Mon 10:55 AM QE Help Problem Set...

    Preview File Edit View Go Tools Window M 14%D Mon 10:55 AM QE Help Problem Set 2.pdf (page 1 of 2) - Edited @ Q Search 3, Megalopolis Bank has the following balance sheet and income statement. S $ Assets Cash and due from banks Investment securities Repurchase agreements Loans Fixed assets Other assets Balance Sheet (in millions) Liabilities and Equity 10,300 Demand deposits 36,000 NOW accounts 55,000 Retail CDs 103,000 Debentures 28,000 Total liabilities 5,300 Common stock Paid-in capital...

  • Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on...

    Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Balance Sheet (in thousands) Assets Rate Earned (%) Cash and due from banks $ 6,000 0 Investment securities 22,000 8 Repurchase agreements 12,000 6 Loans less allowance for losses 80,000 10 Fixed assets 10,000 0 Other earning assets 4,000 9 Total assets $ 134,000 Liabilities and Equity Rate Paid (%) Demand deposits $ 9,000 0 NOW accounts 69,000 5 Retail CDs 18,000...

  • Problem 12-8 (LG 12-5) Smallville Bank has the following balance sheet, rates earned on its assets,...

    Problem 12-8 (LG 12-5) Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Rate Earned (3) Balance Sheet (in thousands) Assets Cash and due from banks $ 7,900 Investment securities 41,000 Repurchase agreements 31,000 Loans less allowance for losses 99,000 Fixed assets 29,000 Other earning assets 5,000 Total assets $212,900 Liabilities and Equity Demand deposits $ 17,000 NOW accounts 88,000 Retail CDs 37,000 Subordinated debentures 33,000 Total liabilities 175,000 Common stock...

  • Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on...

    Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. Rate Earned (%) Balance Sheet (in thousands) Assets Cash and due from banks $ 6, Investment securities 22,000 Repurchase agreements 12.ee Loans less allowance for losses 80, eee Fixed assets 16,eee Other earning assets 4.eee Total assets $134, eee Liabilities and Equity Demand deposits $ 9,000 NOW accounts 69, cee Retail CDs 18,000 Subordinated debentures 14.eee Total liabilities 110, eee Common stock...

  • The financial statements for MHM Bank (MHM) are shown below: Balance Sheet MHM Bank Assets Liabilities...

    The financial statements for MHM Bank (MHM) are shown below: Balance Sheet MHM Bank Assets Liabilities and Equity Cash and due from banks $ 2,070 Demand deposits $ 10,770 Demand deposits at other FIs 2,600 Small time deposits 10,500 Investments 6,370 Jumbo CDs 7,820 Federal funds sold 3,140 Federal funds purchased 620 Loans (less reserve for loan losses of 3,900) 20,350 Other liabilities 3,800 Premises 2,420 Equity 3,440 Total assets $ 36,950 Total liabilities/equity $ 36,950 Income Statement MHM Bank...

  • Balance Sheet MHM Bank Assets Liabilities and Equity Cash and due from banks $ 2,030 Demand...

    Balance Sheet MHM Bank Assets Liabilities and Equity Cash and due from banks $ 2,030 Demand deposits Demand deposits at other PIS 2,200 Small time deposits Investments 6,300 Jumbo CDs Federal funds sold 3,100 Federal funds purchased Loans (less reserve for loan losses of 3,500) 20,270 Other liabilities Premises 2,380 Equity Total assets $36,280 Total liabilities/equity $10,730 10, 460 7,780 580 3,330 3,400 $36,280 Income Statement MHM Bank Interest income Interest expense Provision for loan losses Noninterest income Noninterest expense...

  • i'm analyzing the balance sheet of a bank to try and identify current assets and liabilities,...

    i'm analyzing the balance sheet of a bank to try and identify current assets and liabilities, but i am very unfamiliar with some of these accounts for banks, and the more research i do, the more confused i am. please help me identify which ones are current assets / liabilities here are the assets i am working with: Cash and due from banks Deposits with banks Federal funds sold and securities purchased under resale agreements Securities borrowed Trading assets Investment...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT