Finance Formulas / July 11, 2018 / Rory Wise
The Capital Adequacy Ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. The Capital Adequacy Ratio, also known as capital-to-risk weighted assets ratio (CRAR), is used to protect depositors and promote the stability and efficiency of financial systems around the world.
The personal debtequity ratio is often used in financing, as when an individual or small business is applying for a loan. This form of DE essentially measures the dollar amount of debt an individual has for each dollar of equity they have. DE is very important to a lender when considering a candidate for a loan, as it can greatly contribute to the lender’s confidence (or lack thereof) in the candidate’s financial stability.
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