Calculation of ratios, A security analyst computes the

Calculation of ratios

Reference no: EM1346862

A security analyst calculates the following ratios for two banks. How should the analyst evaluate the financial health of the two banks?

Bank A Bank B
ROE 22% 24%
ROA 2% 1.5%
Equity Multiplier 11X 16X
Profit Margin 15% 14%
Asset Utilization 13% 11%
Spread 3% 3%
Interest Exp. Ratio 35% 40%
Provision for loan loss ratio 1% 4%

Reference no: EM1346862

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