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A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as they reduce profitability. [ 1 ]
The Texas ratio is a metric used to assess the extent of a bank's credit problems. Developed by Gerard Cassidy and others at RBC Capital Markets , it is calculated by dividing the value of the lender's non-performing assets ( NPL + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves.
Loan quality and asset quality are two terms with basically the same meaning. Government bonds and T-bills are considered as good quality loans whereas junk bonds, corporate credits to low credit score firms etc. are bad quality loans. A bad quality loan has a higher probability of becoming a non-performing loan with no return.
The total-debt-to-total-assets ratio is one of many financial metrics used to measure a company’s performance. In this case, the ratio shows how much of a company’s operations are funded by debt.
Non-performing asset, banking term for loans in jeopardy of default, ones that have not paid principal or interest for 90+ days; Northcoast Preparatory and Performing Arts Academy, a high school in Arcata, California, United States; Northland Preparatory Academy, a middle and high school in Flagstaff, Arizona, United States
In particular, for a bank or a financial institution, if the bank or financial institution has a significant amount of non-performing assets (such as loans where full repayment is in doubt), its NIM will generally decrease because interest earned on non-performing assets is treated, for accounting purposes, as repayment of principal and not ...
Liquidity ratios measure the availability of cash to pay debt. [3] Efficiency (activity) ratios measure how quickly a firm converts non-cash assets to cash assets. [4] Debt ratios measure the firm's ability to repay long-term debt. [5] Market ratios measure investor response to owning a company's stock and also the cost of issuing stock. [6]
[7] [8] Ke is most often used in the Capital Asset Pricing Model (CAPM), in which Ke = Rf + ß(Rm-Rf). In this equation, Ke (COE) equals the anticipated return from the difference (Beta) of investment yields from a return based on market expectations (Rm) [ 9 ] and a Risk Free Rate (Rf), such as Treasury Bills or Bonds.