EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Three Months Ended
March 31,
1995 1994
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Earnings before taxes on income $ 63,381 $ 63,544
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Fixed charges
Interest expense - customer 71,905 30,949
Interest expense - other 7,298 4,281
Interest portion of rental expense 4,673 4,031
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Total fixed charges (a) 83,876 39,261
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Earnings before taxes on income and fixed charges (b) $147,257 $102,805
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Ratio of earnings to fixed charges (b) divided by (a)* 1.8 2.6
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Ratio of earnings to fixed charges as adjusted** 6.3 8.6
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* The ratio of earnings to fixed charges is calculated in a manner consistent with SEC
requirements. For such purposes, "earnings" consist of earnings before taxes on income
and fixed charges. "Fixed charges" consist of interest expense incurred on payables
to customers, term debt and one-third of rental expense, which is estimated to be
representative of the interest factor.
** Because interest expense incurred in connection with payables to customers is completely
offset by interest revenue on related investments and margin loans, the Company considers
such interest to be an operating expense. Accordingly, the ratio of earnings to fixed
charges as adjusted reflects the elimination of such interest expense as a fixed charge.