EXHIBIT 12.1
THE CHARLES SCHWAB CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
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Earnings before taxes on income $ 105,743 $ 118,699 $ 216,063 $ 198,369
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Fixed charges
Interest expense - customer 116,019 86,815 224,809 173,206
Interest expense - other 17,107 14,337 31,447 26,955
Interest portion of rental expense 6,521 5,834 12,747 11,261
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Total fixed charges (A) 139,647 106,986 269,003 211,422
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Earnings before taxes on income and fixed charges (B) $ 245,390 $ 225,685 $ 485,066 $ 409,791
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Ratio of earnings to fixed charges (B) divided by (A)* 1.8 2.1 1.8 1.9
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Ratio of earnings to fixed charges as adjusted** 5.5 6.9 5.9 6.2
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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,
borrowings 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 excluding customer interest expense reflects the elimination of
such interest expense as a fixed charge.