大学会计英语课件陈庆柏 主编978 7 81134 917 7unit 16.pptVIP

When compared to the market price of a share of stock, EPS also provides a means of determining how highly the bank stock is regarded in the marketplace. This comparison of the earnings of the bank to the price of the stock is called the price-earnings ratio, or the price-earnings multiple. 16.4 Earnings Per Share (EPS) Why is a bank’s ROE higher than ROA? Is capital adequacy important for a bank? Why? Questions for Unit 16 Define the following terms ROA ROE EPS capital ratio loan loss reserve highly leveraged industry Questions for Unit 16 Paraphrase the following esp. the underlined parts Many bank failures in the 1980s and early 1990s caused bank regulators, investors, and customers to pay particular attention to the financial strength and stability of financial institutions. In bank examination, federal and state authorities try to determine whether a bank’s capital is adequate to support its operation. Questions for Unit 16 This is the end of Unit 16 Thank you for your attention 陈庆柏 王景仙 主编 Unit Sixteen Performance Measurement Ratios Warming-up Questions What are the widely used ratios to measure a bank’s performance or profitability? What was the reason for losses experienced by many banks during the late 1980s and early 1990s? Suggested Answers What are the widely used ratios to measure a bank’s performance or profitability? At least the following 4 measures or financial ratios are widely used by banks’ internal management, investment analysts, and state and federal regulatory authorities to show banks’ performance or profitability: Return on assets (ROA); Return on equity (ROE); capital ratio; and Earnings per share. Suggested Answers What was the reason for losses experienced by many banks during the late 1980s and early 1990s? During the late 1980s and early 1990s as well, many banks experienced losses because of loan problems, primarily in the real estate area. Notes 1. ratio n. 比率 2. capital ratio 资本比率＝a measure of profitability, determined