| ||||||
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 [...] 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 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: [...] 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 [...] 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 [...] |  FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach. | |||||
| Copyright ©2012 FMAccounting.com - All Rights Reserved WordPress SEO fine-tune by Meta SEO Pack from Poradnik Webmastera | ||||||
Recent Comments