Tom Spencer
OCTOBER 13, 2023
Image 1: Illustrative example of a bank’s net interest income and margin Source: CIBC’s 2022 Annual Report 1.2 As an example, corporate lending is characterized by very low efficiency ratios (a good thing) but also low ROE given the large amount of capital charges. It helps assess the bank’s market value relative to earnings.
MishTalk
DECEMBER 14, 2015
Merits of Not Shrinking the Balloon When the Fed first launched QE, they stated they had the "tools" necessary to shrink their ballooning balance sheet. Once the Federal Reserve lifts interest rates from near zero, likely this week, the focus will turn to the other legacy of the crisis-era policies: the Fed's swollen balance sheet.
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MishTalk
OCTOBER 8, 2015
Current Liabilities Cash Much Smaller Than You Think I don't often dive into balance sheets, but did so after reading a Market-Watch opinion by Brett Arends. For example CNN Money points out Apple has $203 billion in cash. For example, he notes $31.5 billion in “off-balance-sheet” liabilities.
Tom Spencer
OCTOBER 6, 2023
Firstly, by outlining the major items on a bank’s income statement, and then by discussing key ratios that are commonly used to measure profitability and to estimate the market value for banks. Image 2: Illustrative example of a bank’s non-interest income 3. Image 3: Illustrative example of a bank’s operating expenses 4.
Tom Spencer
JULY 7, 2023
I was assigned to a typical strategy engagement – should client X selling product Y increase sales in market Z? We repeated our request a week later, but they only provided a balance sheet from the previous year. His advice was specific to consulting, but applicable to other areas of business too.
Tom Spencer
JULY 25, 2021
The justification for the status quo is usually that “all models are wrong, but some are useful” While simplistic assumptions do make for easier math, and can help to predict market outcomes in stylised scenarios, the real world is both complex and dynamic. For example, DeBeers has hoarded diamonds for more than 100 years.
Harvard Business
FEBRUARY 26, 2018
In the 2016 book The End of Accounting , NYU Stern Professor Baruch Lev claimed that over the last 100 years or so, financial reports have become less useful in capital market decisions. This becomes clear when you look at a company’s two most important financial statements: the balance sheet and the income statement.
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