FIN 329
Soy Capital Reprojection
1st Reprojection: Reduce existing levels of average equity and average assets to achieve EM of 10.
Balance Sheet:
• In order to achieve an Equity Multiplier of 10, I decided to shrink the bank by 21,806. This
lowered the Average Total Assets to 361,650.
• Loans – I decided to keep loans the same as in 2013 because the bank would make more money
off of the loans than other earning assets.
• Investments – Investments are highly liquid and decreasing them by 15,000 will not have much
effect on the bank in the short term.
• Non-Earning Assets – I decided the other 25% I needed to shrink should come from non-earning
assets. I chose to do split in the 75/25 ratio because it was fairly close to the original ratio of
85/15 between earning and non-earning assets. I decreased the amount of earning assets
because I didn’t want to lose the extra ten percent in investments.
• Average Equity – I had to drop equity by 21,806 in order to keep assets and liabilities equal.
Income Statement:
