Final answer:
Current assets minus current liabilities equals net working capital, which is part of a bank's financial health reflected on its T-account and balance sheet.
Step-by-step explanation:
The formula Current assets minus current liabilities equals net worth. This formula is used to calculate the net worth of a company or organization. Net worth represents the value of the company's assets after subtracting its liabilities. It shows the overall financial health of the company and whether it has a positive or negative net worth.
Current assets minus current liabilities equals net working capital. In the context of a bank, its assets include financial instruments such as reserves, loans made, and U.S. Government Securities. The liabilities of a bank can consist of deposits made by customers, which the bank owes back to them. The difference between total assets and total liabilities is referred to as net worth or bank capital. On a T-account, one side represents assets while the other side represents liabilities plus net worth. For a bank's balance sheet to balance, assets must always equal liabilities plus net worth, which reflects the financial health of the bank.