Banks have a current ratio

Answer 1

In Bank balance sheet we will not be able to directly take current assets & current liabilities. As per the link: http://www.credfinrisk.com/bank.html, current assets and current liablities can be calculated as below. Current Assets / Liquid assets · Cash and cash due from Central Bank; cash on deposit in postal banking accounts; Due from Banks; Interest-bearing deposits in other banks · Cash held in trust: may be on the behalf of a third party or the result of a merger/acquisition and may have restrictions encumbering its usage. · Due from banks: demand and time deposits with other banks (does not include loans to banks that may be termed time deposits due from banks) and although there is a slight element of risk involved, it is still considered cash. · Negotiable certificates of deposit (should be stated at the lower of cost or net realizable value). · Marketable securities: U.S. Treasury and other U.S. government agencies, States and political subdivisions, exchange listed (publicly traded) securities such as corporate bonds equities, Asset-backed securities Mortgage-backed securities. This account is also sometimes known as Securities Available-for-Sale (amortized; price movements in these securities are dependent upon the movement in market interest rate). Current liabilities · Due to customers (onsight or time deposits): Savings accounts, regular checking accounts, NOW accounts, money market deposit accounts, CDs. · Core deposits consist of all interest-bearing and noninterest-bearing deposits, except certificates of deposit over $100,000. They include checking interest deposits, money market deposit accounts, time and other savings, plus demand deposits. Core deposits represent the most significant source of funding for a bank and are comprised of noninterest-bearing deposits, interest-bearing transaction accounts, nonbrokered savings deposits and nonbrokered domestic time deposits under $100,000. The branch network is a bank's principal source of core deposits, which generally carry lower interest rates than wholesale funds of comparable maturities. · Due to banks (on-sight or time deposits) · Commercial paper issued (rollover every 30 to 270 days) · Short-term borrowings are usually from banks, securities dealers, the Federal Home Loan Bank, unsecured federal funds borrowings, which generally mature daily. · Dividend payable (preferred stock dividend in arrears)