Capitalization ratios

Capitalization ratios

Also called financial leverage ratios, these ratios compare debt to total capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.

Leverage Ratio

In risk analysis, any ratio that measures a company's leverage. One example of a gearing ratio is the long-term debt/capitalization ratio, which is calculated by taking the company's long-term debt and dividing it by its long-term debt added to its preferred and common stock. Another example is a simple debt-to-equity ratio, which is calculated by dividing total debt by total equity. Generally, companies with higher leverage as determined by a leverage ratio are thought to be more risky because they have more liabilities and less equity. A leverage ratio is also called a gearing ratio or an equity multiplier.
References in periodicals archive ?
However, a greater diversification of revenue sources and balance sheet structure would be positive and could improve Rendimento's ratings, allied with the maintaining of its good profitability in addition to adequate liquidity and capitalization ratios, as well as the continuation of a conservative risk appetite with robust controls.
Increasing the authorized capital ceiling will allow the Bank in the future, and when needed, to maintain healthy capitalization ratios in accordance with the standards adopted by the regulatory authorities.
Increasing the authorized capital ceiling will allow Burgan Bank in the future, and when needed, to maintain healthy capitalization ratios in accordance with the standards adopted by the regulatory authorities, its chairman Dr.
Capitalization ratios are also at sector averages -- but this is for a sector where capital adequacy ratios are very strong by global standards.
The bank maintained strong asset quality and capitalization ratios. Gross 90-day NPLs stood at 1.8 percent, an improvement as compared to 2.1 percent one year ago.
Finally, we look at the average bank capitalization ratios of BHCs.
While building these premium quality refining assets, Frontier has maintained one of the lowest debt to capitalization ratios among our peers.
Focusing on current capitalization ratios, without understanding the extent to which the market-oriented nature of capital has become a critical aspect of the competitive scene, can potentially weaken the industry as much as any other competitive disadvantage.
Profit rates may also vary because of differences among activities in their equity capitalization ratios. Although somewhat lower than bank profits in 1988, profit rates for the nonbank activities most like traditional bank activities--commercial finance, mortgage banking, consumer finance, and leasing-are similar to profit rates for banks.
Fitch also acknowledges the recent improvement in BMG's capitalization ratios. The Fitch Core Capital ratio (FCC) increased to 15.6% as of 3Q18 from 14.7% at year-end 2017.
"Most of the Arab banking sectors have adapted to the evolving conditions, or even started to go beyond its implications, as they retain excellent capitalization ratios, and a very good level of liquidity where the majority of the Arab banks have adjusted its lending growth rates ..despite the decline in profits from a number of Arab banks, these banks still achieve good profitability ratios." He noted that Arab banks achieved good growth rates during the first nine months of 2012 compared to the end of the year 2011, where UAE banks' assets grew by 6.1 per cent while there was growth of 6.8 per cent in Saudi banks, 9.9 per cent in Oman, 13.1 per cent in Qatar and between three and seven per cent in other Arab banks.
The ratings also reflect the company's leading position in the Brazilian insurance market, consistent performance through the cycles, diversified revenue base, strong distribution capacity underpinned by Bradesco's wide agency network and comfortable liquidity and capitalization ratios.