Archive for the ‘Ratio Analysis’ Category
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 Â
Loan Recoveries ratio
Loan Loss Reserves
EARNINGS COVERAGE
Capital Adequacy
Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus ReservesÂ
Â
Ratio
Purpose
Formula
 Earnings Coverage Ratio
Â
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
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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 Â
Loan Recoveries ratio
LOAN LOSS RESERVES Â
Earnings coverage
Capital Adequacy
Capital Formation Ratio
Capital to Assets Growth
Gross Capital to Average Assets plus Reserves
ADEQUACY OF LOAN LOSS RESERVE Â Â
Ratio
Purpose
Formula
 Loan Loss Reserve Ratio
Â
Â
To check whether the bank, in comparison [...]
April 25, 2007
Tags: asset quality, bank, loan loss reserves Posted in: Banks/Finan.Institutions, Ratio Analysis
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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
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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
Â
NON-PERFORMING LOANS TO TOTAL LOANS Â Â
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
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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
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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 ! Â When a bank/financial institution get too [...]
April 25, 2007
Tags: asset quality, bad loans, banks Posted in: Banks/Finan.Institutions, Ratio Analysis
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Market Value Added (MVA)
Earlier, the market/book ratio has been mentioned now we look at another useful market based ratio which is known as the Market value added ( MVA).
MVA is the difference between the market value of the company and the total capital invested in the company.
The formula of MVA is =
market capitalization ( number of equity shares [...]
March 24, 2007
Posted in: For Companies
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