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Archive for April, 2007

How To Spot Companies Which Are Likely To Issue Bonus Issue

For readers to have a fuller understanding of the mechanism of bonus issue, please go through all the other articles in this blog:

Understanding Of Bonus Issue
Illustration And Accounting Teatment
Cautious Or To Be Prudent With Bonus Issue
Basic Understanding of Rights Issue And The Difference With Bonus Issue

In earlier articles in this blog, I have also mentioned [...]

April 26, 2007  Tags: Bonus issue  Posted in: Articles  No Comments

Asset Quality –Earnings Coverage

To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

Loans Loss
Non-performing loans to total loans  
Loan Recoveries ratio
Loan Loss Reserves
EARNINGS COVERAGE
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves 

 

Ratio
Purpose
Formula

 Earnings Coverage Ratio
 

Measures the level of earnings and the charge to income [...]

April 25, 2007  Tags: asset quality, banks, earning coverage, Earnings  Posted in: Banks/Finan.Institutions, Ratio Analysis  No Comments

Asset Quality – Adequacy Of Loan Loss Reserves

To assess the Asset Quality, the following ratios need to be analyzed:

Loans Loss
Non-performing loans to total loans  
Loan Recoveries ratio
LOAN LOSS RESERVES  
Earnings coverage
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves

ADEQUACY OF LOAN LOSS RESERVE   

Ratio
Purpose
Formula

 Loan Loss Reserve Ratio
 
 

To check whether the bank, in comparison [...]

April 25, 2007  Tags: asset quality, bank, loan loss reserves  Posted in: Banks/Finan.Institutions, Ratio Analysis  No Comments

Defensive Interval

One interesting liquidity ratio is the defensive interval which reflects theoretically how long the company can survive or defend itself in terms of its available cash plus cash equivalent ( most liquid cash) versus its daily cash operating requirement.

Ratio

Purpose
Formula

Defensive ratio

Used to indicate the number of days a company could theoretically remain [...]

April 25, 2007   Posted in: For Companies, Ratio Analysis  No Comments

Asset Quality-Non Performing Loans To Total Loans

To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

Loans Loss
NON-PERFORMING LOANS TO TOTAL LOANS
Loans Recoveries Rate
Loans Loss Reserve
Earnings coverage
Capital Adequacy

Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves

 
NON-PERFORMING LOANS TO TOTAL LOANS   

Ratio

Measure
Formula

 Non Performing Loans To Total Loans
· helps determine the quantum [...]

April 25, 2007  Tags: asset quality, banks, non-performing loans to total loans  Posted in: Banks/Finan.Institutions, Ratio Analysis  One Comment

Asset Quality-Loans Loss

To assess the Asset Quality of Banks/Financial Institutions, the following ratios need to be analyzed:

LOANS LOSS
Non-performing loans to Total Loans
Loans Recoveries Ratio
Loans Loss Reserves
Earnings coverage
Capital Adequacy

Capital Formation Ratio

Capital to Assets Growth

Gross Capital to Average Assets plus Reserves

LOANS LOSS:

Poor asset quality is reflected in the loans written off or loans loss ratio, [...]

April 25, 2007   Posted in: Banks/Finan.Institutions, Ratio Analysis  One Comment

Asset Quality Of Banks And Financial Institutions- Introduction

One of the fundamental reasons for a bank/financial institution to collapse is its poor asset quality namely giving out bad or poor credit standard loans Not even foreign exchange exposure, deposits, maturity mismatches and open positions can hit it so hard to cause a bank/financial institution to collapse !  When a bank/financial institution get too [...]

April 25, 2007  Tags: asset quality, bad loans, banks  Posted in: Banks/Finan.Institutions, Ratio Analysis  No Comments

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