Balance SheetLeverage in the Financial System

Balance Sheet | Goldman Sachs

http://finance.yahoo.com/q/bs?s=GS,+&ql=1

Total Assets = $859,914,000

Total Liabilities = $778,285,000

Total Equity (Net Worth) = $81,629,000

Balance Sheet | Goldman Sachs

Leverage = Total Liabilities/ Net Worth (Equity)

778,285,000/ 81,629,000 = 9,53

For every $10 of assets the bank holds, $9,53 is financed by borrowing and $0,47 input by shareholders.

(What proportion of debt and equity, is the company using to finance their assets?)

Balance Sheet | Goldman Sachs

For each $100 of assets, how much is financed with equity and how much with debt?

Equity Ratio = Equity/Assets

81,629,000/859,914,000 = 0,09

For each $100 of assets, $9 is financed by Equity and $91 is financed by Liabilities

(Proportio of equity used to finance Company’s assets)

Balance Sheet | Goldman Sachs

By what percentage would assets have to decline in value to bankrupt the Financial Institution?

Balance Sheet | AIG

http://finance.yahoo.com/q/bs?s=AIG%2C+&ql=1

Total Assets = $529,109,000

Total Liabilities = $420,948,000

Total Equity (Net Worth) = $108,161,000

Balance Sheet | AIG

Leverage?

Equity Ratio?

Bankrupt?