Calculate the equity capital ratio

Reference no: EM13255586

A bank's assets consist of the following:
Cash $1.5 million
Loans $10 million
Securities $4.5 million
Fixed Assets $2 million
In addition, the bank's owners' capital is $1.5 million.

A. Calculate the equity capital ratio.
B. If $2 million in bad loans were removed from the bank's assests, show how the equity capital ratio would change.

Reference no: EM13255586

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