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Bank Management.edited

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Running head: BANK MANAGEMENT 1
Bank Management
Student’s Name
Institutional Affiliation

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BANK MANAGEMENT 2
Bank Management
Bank administration is a process of governing banks statutory tasks with a primary
purpose of building an optimal system of association between the components of banking
mechanism in the perspective of making profits. Rose and Hudgins, (2005), reveal that effective
bank management promotes a successful optimization of the profitability-risk ratio in the lending
operations. JP Morgan Chase and Wells Fargo bank and company are the two banks of interest
for the analysis of financial statements aimed at evaluating the financial health of the banks.
Financial statements review provides an analyst with a chance to evaluate the quality of
management, profitability of a company and the suitability to making an investment with a
company stocks and equity.
Profitability Analysis
The profitability assessment is based on the two banks 2015 financial statements.
1. Return on Equity
Return on equity (ROE) is profitability ratio utilized in evaluating the ability of a firm to
generate proceeds from the company’s shareholders investments. Return on equity equals to the
net income divided by the shareholders’ equity.
a. ROE for JP Morgan Chase
Net income = 24,442
Shareholder’s equity = 247,573
ROE = 24,442/247,573
ROE= 0.10

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Running head: BANK MANAGEMENT Bank Management Student’s Name Institutional Affiliation 1 BANK MANAGEMENT 2 Bank Management Bank administration is a process of governing banks statutory tasks with a primary purpose of building an optimal system of association between the components of banking mechanism in the perspective of making profits. Rose and Hudgins, (2005), reveal that effective bank management promotes a successful optimization of the profitability-risk ratio in the lending operations. JP Morgan Chase and Wells Fargo bank and company are the two banks of interest for the analysis of financial statements aimed at evaluating the financial health of the banks. Financial statements review provides an analyst with a chance to evaluate the quality of management, profitability of a company and the suitability to making an investment with a company stocks and equity. Profitability Analysis The profitability assessment is based on the two banks 2015 financial statements. 1. Return on Equity Return on equity (ROE) is profitability ratio utilized in evaluating the ability of a firm to generate proceeds from the company’s shareholders investments. Return on equity equals to the net income divided by the shareholders’ equity. a. ROE for JP Morgan Chase Net income = 24,442 Shareholder’s equity = 247,573 ROE = 24,442/247,573 ROE= 0.10 BANK MANAGEMENT b. ROE for Well Fargo Bank Net income = 22,894,000 Shareholder’s equity = 192,998,000 ROE = 22,894,000/192,998,000 ...
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