Complete the following: Compute the following ratios for as many years as you ca
ID: 2812965 • Letter: C
Question
Complete the following: Compute the following ratios for as many years as you can, showing your numerator and denominator, as well as the ratio result. Create a table that shows the ratios for Capital One(C) for the most current year only.Return on equity
Return on assets
Net interest margin
Net noninterest margin
Earnings spread
Net operating margin
Net profit margin (use net income/total revenue)
Tax management efficiency ratio
Expense control efficiency ratio
Asset utilization ratio (total revenue/total assets)
Equity multiplier (total assets/total stockholders’ equity).
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions Dec. 31, 2017 Dec. 31, 2016 Cash and cash equivalents: Cash and due from banks $ 4,458 $ 4,185 Interest-bearing deposits and other short-term investments 9,582 5,791 Total cash and cash equivalents 14,040 9,976 Restricted cash for securitization investors 312 2,517 Securities available for sale, at fair value 37,655 40,737 Securities held to maturity, at carrying value 28,984 25,712 Loans held for investment: Total loans held for investment 254,473 245,586 Allowance for loan and lease losses (7,502) (6,503) Net loans held for investment 246,971 239,083 Loans held for sale, at lower of cost or fair value 971 1,043 Premises and equipment, net 4,033 3,675 Interest receivable 1,536 1,351 Goodwill 14,533 14,519 Other assets 16,658 18,420 Total assets 365,693 357,033 Liabilities: Interest payable 413 327 Deposits: Non-interest-bearing deposits 26,404 25,502 Interest-bearing deposits 217,298 211,266 Total deposits 243,702 236,768 Securitized debt obligations 20,010 18,826 Other debt: Federal funds purchased and securities loaned or sold under agreements to repurchase 576 992 Senior and subordinated notes 30,755 23,431 Other borrowings 8,940 17,211 Total other debt 40,271 41,634 Other liabilities 12,567 11,964 Total liabilities 316,963 309,519 Stockholders’ equity: Preferred stock (par value $.01 per share; 50,000,000 shares authorized; 4,475,000 shares issued and outstanding as of both December 31, 2017 and 2016) 0 0 Common stock (par value $.01 per share; 1,000,000,000 shares authorized; 661,724,927 and 653,736,607 shares issued as of December 31, 2017 and 2016, respectively, 485,525,340 and 480,218,547 shares outstanding as of December 31, 2017 and 2016, respectively) 7 7 Additional paid-in capital, net 31,656 31,157 Retained earnings 30,700 29,766 Accumulated other comprehensive loss (926) (949) Treasury stock, at cost (par value $.01 per share; 176,199,587 and 173,518,060 shares as of December 31, 2017 and 2016, respectively) (12,707) (12,467) Total stockholders’ equity 48,730 47,514 Total liabilities and stockholders’ equity 365,693 357,033 Unsecuritized loans held for investment Cash and cash equivalents: Total cash and cash equivalents 8,196 7,296 Securities available for sale, at fair value 907 901 Loans held for investment: Total loans held for investment 218,806 213,824 Other assets 729 672 Total assets 65,092 57,758 Other debt: Senior and subordinated notes 14,392 8,304 Other borrowings 1,633 1,610 Other liabilities 337 330 Total liabilities 16,362 10,244 Stockholders’ equity: Total stockholders’ equity 48,730 47,514 Total liabilities and stockholders’ equity 65,092 57,758 Loans held in consolidated trusts Loans held for investment: Total loans held for investment $ 35,667 $ 31,762CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions
12 Months Ended Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2015 Interest income: Loans, including loans held for sale $ 23,388 $ 21,203 $ 18,785 Investment securities 1,711 1,599 1,575 Other 123 89 99 Total interest income 25,222 22,891 20,459 Interest expense: Deposits 1,602 1,213 1,091 Securitized debt obligations 327 216 151 Senior and subordinated notes 731 476 330 Other borrowings 102 113 53 Total interest expense 2,762 2,018 1,625 Net interest income 22,460 20,873 18,834 Provision for loan, lease and other losses 7,551 6,459 4,536 Net interest income after provision for credit losses 14,909 14,414 14,298 Non-interest income: Interchange fees, net 2,573 2,452 2,264 Service charges and other customer-related fees 1,597 1,646 1,856 Gain (Loss) on Sale of Securities, Net 65 (11) (32) Other 542 541 491 Total non-interest income 4,777 4,628 4,579 Non-interest expense: Salaries and associate benefits 5,899 5,202 4,975 Occupancy and equipment 1,939 1,944 1,829 Marketing 1,670 1,811 1,744 Professional services 1,097 1,075 1,120 Communications and data processing 1,177 1,169 1,055 Amortization of intangibles 245 386 430 Other 2,167 1,971 1,843 Total non-interest expense 14,194 13,558 12,996 Income from continuing operations before income taxes 5,492 5,484 5,881 Income tax provision 3,375 1,714 1,869 Income from continuing operations, net of tax 2,117 3,770 4,012 Income (loss) from discontinued operations, net of tax (135) (19) 38 Net income 1,982 3,751 4,050 Dividends and undistributed earnings allocated to participating securities (13) (24) (20) Preferred stock dividends (265) (214) (158) Net income available to common stockholders $ 1,704 $ 3,513 $ 3,872 Basic earnings per common share: Net income from continuing operations (in dollars per share) $ 3.80 $ 7 $ 7.08 Income (loss) from discontinued operations (in dollars per share) (0.28) (0.04) 0.07 Net income per basic common share (in dollars per share) 3.52 6.96 7.15 Diluted earnings per common share: Net income from continuing operations (in dollars per share) 3.76 6.93 7 Income (loss) from discontinued operations (in dollars per share) (0.27) (0.04) 0.07 Net income per diluted common share (in dollars per share) 3.49 6.89 7.07 Dividends paid per common share (in dollars per share) $ 1.60 $ 1.60 $ 1.50Explanation / Answer
Below are ratios for the year 2017
Return on Equity = Net Income availabe to common share holders /Average common equity=1704/(48730+47514)/2=1704/48122=0.03541=3.541%
Return on asset = Net income/Average asset = 1704/(365693+357033)/2 = 1704/361363 = 0.004715=0.47%
Net interest Margin = Net Interest Income/averate earning asset = Average (Interest-bearing deposits and other short-term investments, Gross loans held for investment, Loans held for sale, at lower of cost or fair value, Securities available for sale, at fair value, Securities held to maturity, at carrying value) = 22460/325267=0.0690=6.9%
Net Non Interest Margin = (Non inerest Income - non inerest expense)/ Average earning asset= (4777 - 14194)/325267= -9417/325267=-02895 = Absolute 2.8%
Solved the first four ratios due to length of question and time limit.