FIN 331
Financial Institutions and
Markets

FINAL TERM
PROJECT
Spring Quarter

Group 5
Shad Boots
Alejandro Carral
Antonio Fernandez
Johnny Pham

June 11, 2014
CALIFORNIA STATE UNIVERSITY OF LOS ANGELES

CONTENTS
Introduction ...................................................................................................................................................................2
Financial Markets ..........................................................................................................................................................3
Quantitative Easing ..............................................................................................................................................5
Financial Institutions .....................................................................................................................................................7
Credit Suisse ........................................................................................................................................................7
Wedbush Securities ..............................................................................................................................................9
Conclusion ................................................................................................................................................................... 11
Appendix A ................................................................................................................................................................. 12
Appendix B .................................................................................................................................................................. 14
Appendix C .................................................................................................................................................................. 18
Works Cited ................................................................................................................................................................. 22

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INTRODUCTION
The financial system in the United States is the catalyst to what makes the money go round. This system comprises of financial institutions and resides within the distinct financial markets. The financial market relies on such institutions for funds to flow through the economy.
Effectiveness has been witness throughout the years until recent economic crisis. The question to how far the effects of the crisis were to the economy is determined with the comparison of financial firms. In the following analysis, a discussion on the recent collapse of the financial markets and their relationship to the failure of financial institutions are evident to the downfall of the financial system in the late 2000’s.

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FINANCIAL MARKETS
The Great Depression ushered in an era of unprecedented regulation, but it was also a period of growth and stability. For 40 years afterward, the United States grew and did not have a single financial crisis. Since the 1980's, when deregulation of the financial sector first started, there has been a series of increasingly severe financial crises - including The Great Recession. It is important to explore the most recent financial crisis; along with the background leading up to the collapse, the players involved, and potential solutions.
Before the deregulation of the financial sector, loans were given and held onto by the lenders. By holding onto the loans they offer, these lenders assumed all of the risk and were consequently very careful about such offered loans. This changed in the 1990’s, when deregulation and advances in technology led to a new financial instrument: derivatives. Lenders would package mortgages together into mortgage-backed securities and sell shares of them to investment banks. In order to make a profit, these investment banks would repackage these securities into collateralized debt obligations (CDOs) and sell them to investors.
The selling of these securities allowed lenders to transfer the risk onto others.
Theoretically, this was an excellent instrument to promote lending while minimizing risk. Yet, due to the Commodity Futures Modernization Act, which banned any regulation of derivatives, lenders started making riskier loans. After all, they took on a fraction of the risk and investment banks encouraged increased lending because that meant they could sell more of these CDOs.
Each of these players had incentive to increase the market for derivatives. Everyone was making money. Consequently, enormous amounts of money where paid to corporate executives to encourage short-term profits. To drive these short-term profits high, they needed as many of

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these derivatives as they could possibly get their hands on to sell them as solid investments. The
CEO of Lehman Brothers, for example, took home $485 million dollars.
In addition to the lack of regulation on derivatives, the government raised the threshold on the amount of leverage a bank could hold. This meant they were able to take on far more loans than previously. Two of the biggest lenders were Countrywide Financial (who issued $97 billion in loans) and Lehman Brothers (who was a top underwriter of subprime lending).
Further, AIG created an offshoot instrument of CDOs called Credit Default Swaps.
Essentially, this was an insurance instrument that anyone could buy - even if the loan was not own by them in the first place. The lack of regulation and oversight in the derivatives market allowed multiple players to insure the same loan.
The ratings agencies (such as Moody’s, Standard and Poor’s, and Fitch) grade each of these investments. These ratings convey the likelihood of paying back to the investors. However, these subprime mortgages, mortgage-backed securities and CDOs were given the highest levels of ratings, AAA. Without such a rating, fewer investments would have been created due to less demand. This inevitably led to a massive bubble in the housing market and in the derivatives market. The riskier behavior by banks - through predatory lending (coercing people into taking on loans they could not afford) - led to a massive amount of defaults. These defaults directly resulted in companies such as AIG, who sold insurance on these investments to anyone who would have them, unable to pay investors their losses. The number of defaults had skyrocketed by 2008 and Bear Sterns ran out of cash; JP Morgan later acquired it. Fannie Mae and Freddie
Mac were taken over by the federal government after it was discovered that they had overstated their earnings by billions of dollars. Bank of America acquired Merrill Lynch. Each of these companies held high investment-grade ratings at the time of their demise.
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These collapses forced the government to step in and institute bailout measures in order to prevent financial Armageddon. This was the only move that the government had. However, measures were vital to restore the regulations that were in place before the deregulation period began. As George Soros mentioned in the documentary Inside Job: the financial markets are akin to massive oil tankers that are massive and require compartments to prevent the capsizing of the boat. Further, there is a crucial need for a system of checks and balances where no one player, entity or small concentration of entities holds the power over the financial sector. As the documentary showed, many of those in power were warned about the impending disaster and either refused to believe it, had a conflict of interest, or simply did not want to “rock the boat”.
The lack of business ethics was apparent.
Above all, it was the increased lack of deregulation and lack of accountability that led to the financial collapse in 2008. Moreover, the deregulation led to a concentration of powers in the banking and financial services industry, as well as a new financial instrument that those in power
(who most likely had skin in the game) did not want to see it regulated. Ultimately, the taxpayers have paid the price for their immense greed and irresponsibility.

QUANTITATIVE EASING
With the aforementioned, the chaos found in the economy was in need of continuing solutions. Eventually, the government responded with a policy known as quantitative easing
(QE). The Central Bank purchases securities in this unconventional monetary policy in order to lower interest rates and increment the money supply. In turn, the goal for this policy is to provide financial institutions with capital in an effort to promote more lending and liquidity.

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“Quantitative easing is easing is basically when short-term interest rate are at or approaching zero, and does not involve the printing of new banknotes” (Investopedia.com).
The possible benefits of QE would suppress the long-term interest rates, which influences the increase of stock investments for higher returns. This in turn would stimulate the economy if done effectively. As a result, if done effectively, this would lessen the value of currency and assist in foreign trade.
Along with the benefits of the QE process, there are several risk associated with such.
First, QE does not solve the underlying economic problems; it only provides a temporary solution. Eventually, there will have to be a reckoning. Second, QE encourages investors to participate in increasingly risk behavior, which is partially to blame for the Great Recession.
Third, if the Central Bank tries to prevent inflation and raise interest rates, it will have to drain the money it put into the market to keep it afloat; the consequences of which could be severe.
Essentially, the market can hold the entire economy hostage (Fratzscher, et al.).
Additionally, there is often an unforeseen impact on the foreign market. Some foreign policy makers argue that QE creates excessive global liquidity and causes an acceleration of capital to emerging market economies. Moreover, this acceleration may cause financial imbalances in such economies. (See Appendix A for comparison of QE1, QE2, QE3).
According to a survey done by CNN Money of investment strategists, a large majority of investors (93%) and economists (77%) thought that another period of QE would boost investment, but would have little effect on the broader economy. This is because rates are already at their lowest points and yet money is not moving as fluid as it used to; since, banks are holding on to $1.5 trillion in excess reserves. Furthermore, many worry that an additional round of QE would lead to an out of control inflation once the economy recovers (money.cnn.com).

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FINANCIAL INSTITUTIONS
Financial institutions provide several services to sectors of the economy. The failure of the provision to these services can equal to a tremendous cost to the economy. The financial crisis of the late 2000’s is a demonstration of how such failure can debilitate financial markets worldwide and bring the global economy into a deep recession (Saunders & Millon). This has brought the attention to the research and comparison of two financial institutions.

CREDIT SUISSE
Credit Suisse Group is a well-known financial services holding company based in Zurich,
Switzerland. The organization is a stock corporation (AG). It owns the Credit Suisse bank and other interests in the financial services business. A board of directors, its shareholders and independent auditors governs credit Suisse.
The financial company has three divisions, Investment Banking, Private Banking, and
Asset Management. “Operations are divided into four regions: Switzerland, Europe, the Middle
East and Africa, the Americas and the Asian Pacific. Credit Suisse Private Banking has wealth management, corporate and institutional businesses. Credit Suisse Investment Banking handles securities, investment research, trading, prime brokerage and capital procurement. Credit Suisse
Asset Management sells investment classes, alternative investments, real estate, equities, fixed income products and other financial products” (Credit Suisse).
Credit Suisse's founder, Alfred Escher, known as "the spiritual father of the railway law of 1852," for his work defeating the idea of a state-run railway system in Switzerland in favor of privatization. In its first year of operation, 25 percent of the bank's revenues were from the
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Swiss Northeastern Railway, were built by Escher's company, Nordostbahn. (Meier, et al., 89).
The financial institution has maintained a respectable reputation from its inception until the after effects of the financial crisis in the United States.
According to The Wall Street Journal in the article “Credit Suisse’s Secret Deals”, written in 2009, Credit Suisse survived the credit crisis better than many competitors did. Credit
Suisse had $902 million in write-downs for subprime holdings and the same amount for leveraged loans, but it did not have to borrow from the government. In turn, the U.S. authorities investigated and sued Credit Suisse, along with other banks, for bundling mortgage loans with securities, misrepresenting the risks of underlying mortgages during the housing boom era. In addition, the company went under investigation for its use of accounts for tax evasion.
Furthermore, in the article “Credit Suisse May Revamp Asset-Management Unit” found in The Wall Street Journal in 2012, Credit Suisse cut more than one-trillion in assets, following the crisis, and made plans to cut its investment-banking ARM 37 percent by 2014. It reduced emphasis on investment banking and focused on private banking and wealth management. In
July 2011, Credit Suisse cut 2,000 jobs in response to a weaker than expected economic recovery and later merged its asset management with the private bank group to cut additional costs. In response to the aforementioned issues, a financial analysis will provide a subjective perspective.
The use of the company’s 2006 and 2013 annual reports (amounts are kept in millions and Swiss
Francs, since dealing with percentages and ratios) along with the use of a few critical financial ratios help perform such analysis (see Appendix B).
Subsequently, in March 2014, “Credit Suisse denied claims it had been drawn into a
Swiss competition probe investigating potential collusion to manipulate foreign exchange rates by various Swiss and foreign banks. In May 2014, Credit Suisse pleads guilty to conspiring to aid tax evasion. It was the most prominent bank to plead guilty in the United States since Drexel
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Burnham Lambert in 1989 and the largest to do so since the Bankers Trust in 1999. "Credit
Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes” (The Economic Times).

WEDBUSH SECURITIES
Wedbush Securities is known as one of the largest securities firms and investment banks in the nation. Founded in 1955 and headquartered in Los Angeles, CA, Wedbush Securities possesses three divisions: Private Client Services, Capital Markets, and Clearing & Execution. It is a subsidiary of Wedbush, Inc., which also operates Wedbush Asset Management, Wedbush
Capital Partners, Wedbush Opportunity Partners, and Lime Brokerage.
In looking at this company and its financial statements from 2006 and 2013, we hope to determine how it was affected by The Great Recession, how it compares to Credit Suisse, and how it compares to the industry as a whole. To do this, we looked at the following ratios: current ratio, return on assets, return on equity, debt-to-asset ratio, debt-to-equity ratio, financial leverage ratio, profit margin, equity multiplier, and asset utilization. These were selected to give a well rounded and comprehensive view of the performance of the firm and how the composition of the firm may have changed due to new regulations and practices.
More specific reasons for using the aforementioned ratios are these: liquidity ratios, such as the current ratio, measures the firm’s ability to meet short-term debt obligations; debt ratios, such as the debt-to-asset ratio, measures the ability of the firm to pay off long-term debt; and profitability measures, such as profit margin, measures the general financial health of the firm.
For the sake of brevity, we will focus our discussion on one ratio from each of these categories (for additional numbers, see Appendix C).
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First, the current ratio in 2006 and 2013 remained relatively stable for Wedbush
Securities (1.09 in 2006 to 1.07 in 2013). This meant that the company had the ability to meet short-term debt obligations and, even during The Great Recession. By comparison, Credit Suisse posted current ratios of 1.26 in 2013. This indicates that Credit Suisse is more capable of meeting its short-term debt obligations than Wedbush Securities is. In 2013, Wedbush Securities posted a 0.005 debt-to-asset ratio. When compared to its 2006 level of 0.004, we see that the company, again, has remained relatively stable. On the other hand, Credit Suisse posted debt-toasset ratios of of 0.946 in 2013 and 0.965 in 2006. This indicates that Credit Suisse's assets are largely financed through debt, which can be attributed to having a banking division. Wedbush avoids such a high debt ratio by virtue of not being a depository institution. However, we can conclude that Wedbush Securities has maintained far greater financial flexibility than Credit
Suisse. Finally, Wedbush Securities posted a profit margin ratio of 0.24 in 2013 and the same in
2006. This, again, indicates that Wedbush Securities remained remarkably consistent in their strategy and execution and was excellent in controlling costs. Credit Suisse, in contrast, had a profit margin ratio of 0.115 in 2013 and 0.293 in 2006. This shows that Credit Suisse had a significant decline in its ability to control its costs.

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CONCLUSION
The relevance of the financial crisis in the late 2000’s confirmed the worst financial downfall since the Great Depression. The evidence of corporate greed, shown in managerial decision making for high paying risk returns, tainted the ethics in doing business. The mitigation of the financial dilemma was carried out with the use of quantitative easing (QE).
In result of QE actions taken by the Federal Reserve and other countries, there have been substantial capital inflows into emerging economies. Above all, the QE policies taken by the
Central Bank and their recent attempt to taper said QE has led to an increased vulnerability in the emerging markets. Subjectively, the implementation of QE1 was necessary in attempt to hasten the economic recovery; however, its use towards QE3 or further would lead to less effectiveness due to the concern for a greater inflation.
The evaluation of the financial institutions served as an exemplary indicator to how such managed their operations prior and during the crisis and recession. The virtues of capitalism have been a double-edged sword to our global financial health. In our analysis of two firms,
Credit Suisse and Wedbush Securities, we found that Wedbush Securities remained impressively stable and consistent. In contrast, Credit Suisse saw many of its important ratios move against them in significant ways. Most importantly, we noted that they are almost universally obtaining assets through debt and their profit margins have slimmed to less than half that of Wedbush
Securities. Based on these numbers, we can conclude that Credit Suisse took far greater risk than
Wedbush Securities and therefore felt more impact from The Great Recession. Wedbush
Securities, on the other hand, adjusted well to the change in the market and maintained their position in the market.

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APPENDIX A
Quantitative Easing
Comparison of QE1, QE2, and QE3:

Announcement
Date

List the data sources you used for finding the information Reuter.com

QE1
12/08-06/10

QE2
11/10-06/11

QE3
09/12-Present

11/25/08

11/03/10

09/13/12

$600 billion

$600 billion

09/12: $40 B
12/12: $80 B
09/13: $65 B

“Purpose was to help banks by taking these subprime
MBS off of their balance sheets”. “The Fed was actually hoping to spur inflation a bit by increasing the money supply. Expectations of inflation increase demand, which would spur economic growth. That's because people are more likely to buy consumer products now if they know prices will be higher in the future”. Due to improvement of economy, less was needed, hence resulting in
$65B;
however, contemplating in tapering the
QE3 policies once the economy improves.

Bloomberg.com
Useconomy.com
Amounts launched Reasons launching each
QE

Reuter.com
Useconomy.com

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Stock Market reactions to QE for the period of the first week after announcement
(t=0 to t= 7)
Stock Market reactions to QE for the period t=180 to t= 210)
Commodity
Market:
Gold Price one week after the announcement Commodity
Market:
Gold Price one month after the announcement Yahoofinance.com

-2.25%

-1.02%

-0.38%

Yahoofinance.com

1.96%

1.09%

-0.97%

www.gold.org

36.1%

14.0%

25.7%

www.gold.org

11/25/08:
$820.50
12/25/08:
$843.50

11/03/10:
$1345.50
12/03/10:
$1403.50

09/13/10:
$1775.50
10/13/10:
$1720.75

2.80% www.federalreserve.gov 0.04% / 4 =
0.01%

4.31%
0.13% / 4
= 0.0325%

-0.83%
0.18% / 4
= 0.045%

Bond Market:
Treasury-Bond
yield three months after the announcement www.federalreserve.gov 0.10%

0.13%

0.26%

Foreign Market: one week of the announcements US$ vs. Euro

WRDS: Fed Reserve banks: Foreign
Exchange

11/25/08:
0.7675
12/02/08:
0.7859

11/03/10:
0.7136
11/10/10:
0.7284

09/13/10:
0.7745
09/20/10:
0.7723

2.40%
-7.6%

2.07%
6.7%

-0.28%
0.18%

Bond Market:
Treasury-Bond
yield one week of the announcement

Foreign Market: one month of the announcement US$ vs. Euro
Discussions

WRDS: Fed Reserve banks: Foreign
Exchange
See Conclusion

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APPENDIX B
Credit Suisse
Credit Suisse financial ratios are based on their 2006 and 2013 annual reports. Amounts are in millions, Swiss Francs, due to dealing with percentages and ratios.
Source:
www.credit-suisse.com/publications/annualreporting/doc/2013/csg_ar_2013_en.pdf www.credit-suisse.com/publications/annualreporting/doc/2006/csg_ar_2006_en.pdf  2013
1. Current ratio= 1.26
Current ratio=Assets/Current Liabilities
Cash + trading assets + central bank funds sold + net loans + brokerage receivables / Due to banks + customer deposits + central funds + trading liabilities + brokerage payables
68,692+229,413+160,022+247,054+52,045/23,108+333,089+94,032+76,635+73,154=
1.26
*The current ratio is above 1.0, which points to a good sign of the company’s ability to pay off its current debt.
2. Return on Assets= 0.003 or .03%
Return on Assets= Net Income/Total Assets
2,965/872,806= 0.003 or .03%
3. Return on Equity= 0.076 or 7.6%
Return on Equity= Net Income/Average Shareholders’ Equity
Average Shareholders’ Equity= Beginning Balance of Shareholders’ Equity + Ending
Balance / 2
35,498+42,164/2=38,831
2,965/38831= .076 or 7.6%

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*This reveals the company’s profit margin generated from the money shareholders have invested. 4. Debt to Assets ratio = 94.6%
Debt to Assets ratio = Total Debt/Total Assets
825,640/872,806= .946
*The ratio is below 1, meaning there is less debt than assets, which is a good sign for a firm. 5. Debt to Equity ratio= 21.26
Debt to Equity ratio= Total Debt/Average Shareholders’ Equity
825,640/38,831= 21.26
*The company has a high ratio due to the nature of the banking business, which has high level of liabilities.
6. Financial Leverage ratio= 25.3
Financial leverage ratio= ROE/ROA
076/.003= 25.3
7. Profit Margin= 11.4%
Profit Margin=Net Income/Total Operating Income
2,956/25,856=.1146
8. Equity Multiplier = 20.7
Equity Multiplier=Total Assets/Total Equity Capital
872,806/42,164=20.70
9. Asset Utilization= 2.9%
Asset Utilization=Total Operating Income/Total Assets
25,856/872,806=0.029

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

2006

1. Current ratio= 1.13
Current ratio=Assets/Current Liabilities
Cash + trading assets + central bank funds sold + net loans + brokerage receivables / Due to banks + customer deposits + central funds + trading liabilities + brokerage payables
29,040+8,128+319,048+450,780+208,127/388,040+288,444+198,422+21,556=1.13
*The current ratio is above 1.0, which points to a good sign of the company’s ability to pay off its current debt.
2. Return on Assets= 0.9%
Return on Assets= Net Income/Total Assets
11,327/1,255,956= .009
3. Return on Equity= 25.8%
Return on Equity= Net Income/Average Shareholders’ Equity
11,327/43,856= .258
*This reveals the company’s profit margin generated from the money shareholders have invested. Therefore, Credit Suisse received 25.8% of every Swiss Franc invested by owners. 4. Debt to Assets ratio = 96.5%
Debt to Assets ratio = Total Debt/Total Assets
1,212,370/1,255,956= .965
*The ratio is below 1, meaning there is less debt than assets, which is a good sign for a firm. 5. Debt to Equity ratio= 27.81
Debt to Equity ratio= Total Debt/Average Shareholders’ Equity
1,212,370/43,586= 27.81

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6. Financial Leverage ratio= 28.66
Financial leverage ratio= ROE/ROA
.258/.009=28.66
7. Profit Margin= 29.3%
Profit Margin=Net Income/Total Operating Income
11,327/38,603= .293
8. Equity Multiplier = 28.81
Equity Multiplier=Total Assets/Total Equity Capital
1,255,956/43,586= 28.81
9. Asset Utilization= 3%
Asset Utilization=Total Operating Income/Total Assets
38,603/1,255,956= .030

Notes on Credit Suisse
The above shows considerable changes in net income, total assets, and total debt from year 2006 to 2013. A considerable rise in net income from 2006 to 2013 is reflected by the
ROA, ROE, and Profit Margins of their respective years. Net income increased 3.8 times over from 2006 to 2013. Total debt increased by over 140%. However, due to a similarly dramatic increase in total assets, the changes from 2006 to 2013 were not that substantial.

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APPENDIX C
Wedbush Securities
Wedbush Securities financial ratios are based on their 2006 and 2013 annual reports.
Source:
www.wedbush.com/sites/default/files/WS_Fin_cond_2013_12_31.pdf www.wedbush.com/sites/default/files/2007.06.WedbushFinancialStatement.pdf  2013
1. Current ratio= 1.07
Current ratio=Assets/Current Liabilities
3,755,244,000 / 3,491,890,000 = 1.07
*The current ratio is above 1.0, which points to a good sign of the company’s ability to pay off its current debt.
2. Return on Assets= 0.006
Return on Assets= Net Income/Total Assets
21,479,547 / 3,491,890,000 = 0.006
*ROA ratio illustrates how well management is employing the company's total assets to make a profit.
3. Return on Equity= 0.08
Return on Equity= Net Income/Average Shareholders’ Equity
21,479,547 / 264,686,000 = 0.08
*Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
4. Debt to Assets ratio = 0.005
Debt to Assets ratio = Total Debt/Total Assets
19,286,000 / 3,755,244,000 = 0.005
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*Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
5. Debt to Equity ratio= 0.14
Debt to Equity ratio= Total Debt/Average Shareholders’ Equity
19,286,000 / 132,343,000 = 0.14
*It indicates what proportion of equity and debt the company is using to finance its assets. 6. Financial Leverage ratio= 13.33
Financial leverage ratio= ROE/ROA
0.08 / 0.006 = 13.33
*Calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations.
7. Profit Margin=0.24
Profit Margin=Net Income/Total Operating Income
21,479,547 / 88,478,878 = 0.24
*Amount by which revenue from sales exceeds costs in a business
8. Equity Multiplier =14.19
Equity Multiplier=Total Assets/Total Equity Capital
3,756,576,000 / 264,686,000 = 14.19
*High equity multiplier indicates that a larger portion of asset financing is being done through debt.
9. Asset Utilization=0.03
Asset Utilization=Total Operating Income/Total Assets
88,478,878 / 3,491,890,000 = 0.03
*Analysis tool that identifies whether company is wasting its assets or putting them to good use.
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 2006
1. Current ratio= 1.09
Current ratio=Assets/Current Liabilities
1,965,225,000 / 1,795,551,000 = 1.09
*The current ratio is above 1.0, which points to a good sign of the company’s ability to pay off its current debt.

2. Return on Assets= 0.005
Return on Assets= Net Income/Total Assets
10,739,773 / 1,969,466,000 = 0.005
*ROA ratio illustrates how well management is employing the company's total assets to make a profit.

3. Return on Equity= 0.12
Return on Equity= Net Income/Average Shareholders’ Equity
10,739,773 / 86,957,500 = 0.12
*Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

4. Debt to Assets ratio = 0.004
Debt to Assets ratio = Total Debt/Total Assets
9,643,000 / 1,969,466,000 = 0.004
**Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
5. Debt to Equity ratio= 0.06
Debt to Equity ratio= Total Debt/Average Shareholders’ Equity
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9,643,000 / 173,915,000 = 0.06
*It indicates what proportion of equity and debt the company is using to finance its assets. 6. Financial Leverage ratio= 24
Financial leverage ratio= ROE/ROA
0.12 / 0.005 = 24
*Calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations.
7. Profit Margin=0.24
Profit Margin=Net Income/Total Operating Income
10,739,773 / 44,239,439 = 0.24
*Amount by which revenue from sales exceeds costs in a business
8. Equity Multiplier =11.32
Equity Multiplier=Total Assets/Total Equity Capital
1,969,466,000 / 173,915,000 = 11.32
*High equity multiplier indicates that a larger portion of asset financing is being done through debt
9. Asset Utilization=0.02
Asset Utilization=Total Operating Income/Total Assets
44,239,439 / 1,969,466,000 = 0.02
*Analysis tool that identifies whether company is wasting its assets or putting them to good use.

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WORKS CITED
Fratzscher, Marcel, Lo Duca, Marco, Straub, Roland. "The International Spillovers of US
Quantitative Easing." European Central Bank, Eurosytem: n. pag. Print.
Saunders, Anthony, and Marcia Millon Cornett. Financial markets and institutions. 5th ed. New
York: McGraw-Hill/Irwin, 2012. Print.
Credit Suisse. "Organizational Guidelines and Regulations of Credit Suisse Group AG and of
Credit Suisse AG". Credit-Suisse.com. Retrieved 5 June 2014.
Meier, Henri B., and John E. Marthinsen. Swiss finance: capital markets, banking, and the Swiss value chain. Hoboken, New Jersey: Wiley, 2013. Print.
"Navigation." Credit Suisse. N.p., n.d. Web. 10 June 2014. .
"Credit Suisse AG says not subject to Swiss competition foreign exchange probe." The Economic
Times. N.p., n.d. Web. 5 June 2014. .
"Navigation." Wed Bush Securities. N.p., n.d. Web. 10 June 2014. .

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