Final answer:
Assets minus liabilities is equal to Shareholder's Equity. This reflects the company's financial stability and is a key element of the balance sheet, reflecting both bank capital and net worth.
Step-by-step explanation:
The question relates to the fundamental accounting equation, which states that Assets minus Liabilities is equal to Shareholder's Equity. This equation forms the basis of a balance sheet, which is an essential financial statement for any business, including banks. A balance sheet lists all of the company's assets, liabilities, and equity at a specific point in time. A firm's assets might include reserves, loans made to customers, and U.S. Treasury bonds. Liabilities include what the bank owes to others, such as customer deposits. The net worth or bank capital of a bank is its total assets minus total liabilities. This provides insight into the financial stability of an institution, reflecting whether the net worth is positive (healthy business) or negative (bankrupt firm).