Question

In what ways would you say a bank’s balance sheet differs from, say, a car manufacturing...

In what ways would you say a bank’s balance sheet differs from, say, a car manufacturing firm’s?

Homework Answers

Answer #1
  • In the bank balance sheet, the assets are the loans given whereas the car manufacturer the loans are the liabilities.
  • In a car manufacturing firm's balance sheet the deposits are assets whereas it will be treated as a liability in the bank's balance sheet.
  • There would be no inventory component in the bank's balance sheet which must be present in the car manufacturing balance sheet.
  • There are schedules in the bank's balance sheet whereas notes in the car manufacturing balance sheet.
  • The book value of debt of the car manufacturing firm is different from the market value but the book value is the same as the market value debt for a bank.
  • Fixed assets of a car manufacturing firm is very high as they have many machinery but it is absent in case of the bank so they have less fixed assets.
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