EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
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Earnings before taxes on income $ 78,058 $ 51,594 $214,726 $168,357
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Fixed charges
Interest expense - customer 84,162 48,843 234,878 118,177
Interest expense - other 9,877 5,755 26,030 14,751
Interest portion of rental expense 5,023 4,353 15,430 12,578
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Total fixed charges (a) 99,062 58,951 276,338 145,506
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Earnings before taxes on income and fixed charges (b) $177,120 $110,545 $491,064 $313,863
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Ratio of earnings to fixed charges (b) divided by (a)* 1.8 1.9 1.8 2.2
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Ratio of earnings to fixed charges as adjusted** 6.2 6.1 6.2 7.2
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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.