NET EARNINGS IN DISTRICT I 
TABLE 100 
LL 
CORRELATION OF DEVIATIONS OF RATIOS IN PAIRED SERIES—MEMBER 
Banks, BosToN FEDERAL RESERVE DISTRICT, 1924 AND 1925 
Percentage Deviations from Respective Yearly Averages for the 
Respective Volume-Groups. See page 279.) 
Position 
Abhave 
Jelow 
INDEPENDENT VARI apLe—Ratios of 
Net Earnings to Earning Assets 
Distance from Average 
--~entar” 
Sapsina 
we 
Inc 
mn 
nce 
lado vv 
nc- 
. a inde 
2 ~nd 1nder 
‘c and under. 
~ and over 
Average 
Yarcentage 
Number 
of 
Bank- 
Years 
D)FPENDENT VARIABLES— 
Net Average Percentage 
Gross Earn- 
ings to 
Tarning 
Assets 
Total 
Expense 
to 
Farning 
Agsets 
enclosed by the vertical parallel lines divides the distribution of 
the total expense ratios into two parts. To the left of this space 
are shown banks with ratios larger, and to the right those 
with ratios smaller than the average. It is apparent that the dots 
found in the area to the left tend to be below and that those 
to the right tend to be above the diagonal zigzag lines. It is 
the area above these lines in which are found net earnings ratios 
larger, and in that below them, net earnings ratios smaller than 
the average. 
In the light of the general tendencies indicated above under 
the numbers 1, 2, and 3, further analysis is necessary in order 
to determine the relative effect of gross earnings and of total 
expense ratios on ratios of net earnings. In making such an 
analysis it is desirable to distinguish between tke levels of net 
earnings ratios at a given time, and the nature of the change of 
these ratios from year to year. 
Briefly, and in repetition of what has already been said, the 
following propositions respecting the ratios at a given time are 
true: