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    Capital Ratio and Balance Sheet Analysis

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    National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities.
    (See attached file for full problem description)

    Assets Liabilities and Equity

    Cash $20 Deposits $980
    Treasury bills 40 Subordinated debentures 40
    Residential mortgage 600 Common Stock 40
    Other loans 430 Retained earnings 30
    --------- -------
    Total assets $1,090 Total liabilities and equity $1,090

    a) What is the leverage ratio?
    b) What is the Tier I capital ratio?
    c) What is the total risk-based capital ratio?
    d) In what capital category would the bank be placed?

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    https://brainmass.com/business/financial-ratios/capital-ratio-balance-sheet-analysis-96761

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    National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities.

    Assets Liabilities and Equity

    Cash $20 Deposits $980
    Treasury bills 40 Subordinated ...

    Solution Summary

    This solution shows step-by-step calculations to determine the leverage ratio, Tier I capital ration, total risk-based capital ratio, and also what capital category the bank will be placed in.

    $2.49

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