Determine the tax management efficiency ratio

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Question: Wilmindtom hills state bank has just submitted its report of condition and report of income to its principal supervisory agency. The bank reported net income before taxes and securities transactions of $ 27 million of taxes of $ 6 million. If its total operating. revenues were $780 million, its total assets $2.1 billion, and its equity capital $125 million, determine the following for Wilmington:

a. Tax management efficiency ratio.

b. Expense control efficiency ratio.

c. Asset management efficiency ratio.

d. Funds management efficiency ratio.

e. ROE.

Alternative scenarios: a. Suppose Wilmington Hills State Bank experienced a 20 percent rise in net before-tax income, with its tax obligation, operating revenues, assets, and equity unchanged. What would happen to ROE and its components?

b. If total assets climb by 20 percent, what will happen to Wilmington's efficiency ratio and ROE?

c. What effect would a 20 percent higher level of equity capital have upon Wilmington's ROE and its components?

Reference no: EM131717470

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