Wells Fargo & Company is the fourth largest bank in the United


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Feb 20, 2015. Wells Fargo & Company is the fourth largest bank in the United States (based on consolidated asset data gathered by the Federal Reserve as of March 31, 2012). Its consolidated statement of income follows. 1. How is this income statement different from all the other income statements illustrated in this chapter? 2. For a merchandising firm, gross profit represents sales less cost of goods sold. For Wells Fargo, what component of the income statement would be similar to gross profit? 3. Compute the following ratios for each of the years 2009–2011: Total interest expense/Total interest income, Incentive compensation/Salaries, and Employee benefits/Salaries. 4. Comment on the ratios you computed in part (3), particularly any trends. 5. The average loans receivable balance for Wells Fargo during 2011 was $742,252 million . The average amount of deposits during 2011 was $884,006 million . Using the income statement data, comment on the average interest rate Wells Fargo pays to its depositors, the average interest rate Wells Fargo earns on its loans receivable, and the spread between these two rates. The market value of Wells Fargo’s stock at the end of each year was $27.56 , $30.99 , and $26.99 for the years 2011, 2010, and 2009, respectively. Compute the firm’s price-earnings ratio for each year. Use diluted earnings per share. Is it increasing or decreasing over time? ATTACHMENT PREVIEW Download attachment 9781133957911-0251-t3.png cokesoda
posted a question · Feb 20, 2015 at 10:05am

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