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Buying assets by borrowing money (taking a loan from a bank or simply buying on credit) 3 − 900 − 900 Selling assets for cash to pay off liabilities: both assets and liabilities are reduced 4 + 1,000 + 400 + 600 Buying assets by paying cash by shareholder's money (600) and by borrowing money (400) 5 + 700 + 700 Earning revenues 6 − 200 ...
Capital adequacy ratio is the ratio which determines the bank's capacity to meet the time liabilities and other risks such as credit risk, operational risk etc. In the most simple formulation, a bank's capital is the "cushion" for potential losses, and protects the bank's depositors and other lenders.
The basic formula is: ... is the economic capital employed (total assets − current liability); NOPAT is the net operating profit after tax, with adjustments and ...
The formula to calculate corporate rate of return on assets is quite simple. All you have to do to calculate it is divide a company’s net income by its total assets.
It is commonly represented as total assets less current liabilities (or fixed assets plus working capital requirement). [ 2 ] ROCE uses the reported (period end) capital numbers; if one instead uses the average of the opening and closing capital for the period, one obtains return on average capital employed ( ROACE ).
The net asset value formula is calculated by adding up what a fund owns and subtracting what it owes. For example, if a fund holds investments valued at $100 million and has liabilities of $10 ...
The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities. [4] Another way to look at the balance sheet equation is that total assets equals liabilities plus owner's equity.
Risk-weighted asset (also referred to as RWA) is a bank's assets or off-balance-sheet exposures, weighted according to risk. [1] This sort of asset calculation is used in determining the capital requirement or Capital Adequacy Ratio (CAR) for a financial institution.