Lecture 58: Understanding Gearing and Leverage ratios (Debt equity ratio)- Solvency ratio
ฝัง
- เผยแพร่เมื่อ 25 ธ.ค. 2021
- How do banks calculate gearing and Leverage ratio? What is the formula of Debt to equity ratio or what is formula of gearing and leverage ratio?
What is exactly gearing and leverage ratio?
Why gearing and leverage ratio (Debt equity ratio) are called solvency ratios?
What is quasi equity? What is treatment of quasi equity in ratio analysis?
What is treatment of bank guarantees and contingent liabilities in calculation of Debt to equity ratio, solvency ratio and gearing and leverage ratio?
What is ideal gearing and leverage ratio considered good in banks?
What is difference between gearing and leverage ratios?
How to improve our debt to equity ratio or how to improve our gearing and leverage ratio?
Let us answer all the above questions and learn many more new things through this video.
Gearing and leverage ratio are key ratios in banking sector to ascertain the solvency position of the client. They are also known as:
Debt to equity ratio, TOL/TNW, TOL/ATNW, Total debt/TNW, Total debt/ATNW, Debt ratio, Debt to capital ratio, Debt to net worth ratio, Debt to adjusted net worth ratio.
In CMA data projections of balance sheet, There are 5 things to focus on namely MPBF norms, Current ratio, Solvency ratio covering Gearing and leverage, Debtor + Creditor + Inventory cycle in days and offcourse mathematical calculations and logics. I have already covered MPBF norms and current ratio in detail in my previous videos. So please cover it along with this video for better understanding of the topic.
These ratios need to maintained at certain level as required by different banks as per their internal guidelines. I have explained in detail the whole concept of solvency ratios with main focus on Gearing (Also called Debt to equity ratio) and Leverage ratio. Lower the solvency ratio and the better it is for banks since risk will be on lower side. Pl go through this video in full so that the whole concept can be cleared.
#ratioanalysis #solvencyratio #gearingratio #leverageratio #debtequityratio #networth #quasiequity #adjustedtotalnetworth #balancesheet #financialanalysis #cmadata #cmaprojections #projections #projectreport #totaldebt/equity #totaloutsideliability/networth #financialratioanalysis #financialratios #ratioformulae #Dataanalysis
________________________________________________________________________
बैंक गियरिंग और उत्तोलन अनुपात की गणना कैसे करते हैं? डेट टू इक्विटी रेशियो का फॉर्मूला क्या है या गियरिंग और लीवरेज रेशियो का फॉर्मूला क्या है?
वास्तव में गियरिंग और उत्तोलन अनुपात क्या है? गियरिंग और लीवरेज अनुपात (ऋण इक्विटी अनुपात) को सॉल्वेंसी अनुपात क्यों कहा जाता है?
अर्ध इक्विटी क्या है? अनुपात विश्लेषण में अर्ध इक्विटी का उपचार क्या है?
ऋण से इक्विटी अनुपात, शोधन क्षमता अनुपात और गियरिंग और उत्तोलन अनुपात की गणना में बैंक गारंटी और आकस्मिक देनदारियों का क्या उपचार है?
बैंकों में आदर्श गियरिंग और उत्तोलन अनुपात क्या अच्छा माना जाता है?
गियरिंग और लीवरेज अनुपात में क्या अंतर है?
इक्विटी अनुपात में हमारे ऋण को कैसे सुधारें या हमारे गियरिंग और उत्तोलन अनुपात में सुधार कैसे करें?
आइए ऊपर दिए गए सभी सवालों के जवाब दें और इस वीडियो के जरिए और भी कई नई चीजें सीखें।
ग्राहक की सॉल्वेंसी स्थिति का पता लगाने के लिए बैंकिंग क्षेत्र में गियरिंग और लीवरेज अनुपात प्रमुख अनुपात हैं
बैलेंस शीट के सीएमए डेटा अनुमानों में, एमपीबीएफ मानदंड, वर्तमान अनुपात, गियरिंग और लीवरेज को कवर करने वाला सॉल्वेंसी अनुपात, दिनों में देनदार लेनदार इन्वेंटरी चक्र और ऑफकोर्स गणितीय गणना और तर्क पर ध्यान केंद्रित करने के लिए 5 चीजें हैं। मैंने अपने पिछले वीडियो में एमपीबीएफ मानदंड और वर्तमान अनुपात को पहले ही विस्तार से कवर कर लिया है। तो कृपया विषय को बेहतर ढंग से समझने के लिए इसे इस वीडियो के साथ कवर करें। यह वीडियो सॉल्वेंसी रेश्यो भाग पर केंद्रित है।
इन अनुपातों को एक निश्चित स्तर पर बनाए रखने की आवश्यकता है जैसा कि विभिन्न बैंकों द्वारा अपने आंतरिक दिशानिर्देशों के अनुसार आवश्यक है। इस वीडियो में, मैंने गियरिंग (इसे ऋण से इक्विटी अनुपात भी कहा जाता है) और उत्तोलन अनुपात पर मुख्य ध्यान देने के साथ सॉल्वेंसी अनुपात की पूरी अवधारणा को विस्तार से समझाया है। सॉल्वेंसी अनुपात जितना कम होगा और बैंकों के लिए उतना ही बेहतर होगा क्योंकि जोखिम कम होगा। कृपया इस वीडियो को पूरा देखें ताकि पूरी अवधारणा को स्पष्ट किया जा सके।
#Workingcapital #Finance #Loan #CreditManager #Creditofficer #loanmanager #Banking #ratiocalculator #leverageratiodefinition #debtratio #debtratiodefinition #ratiodefinition #gearingratioexplanation
What is ratio analysis? What are Basic financial ratios? What is debt to equity ratio? What is considered a good Debt to equity ratio? What is Debt to capital ratio definition? Ratio analysis introduction.
What is considered as good or bad gearing ratio and leverage ratio?
Leverage ratio in Hindi.
अनुपात विश्लेषण क्या है? बुनियादी वित्तीय अनुपात क्या हैं? डेट टू इक्विटी रेश्यो क्या है? इक्विटी अनुपात के लिए एक अच्छा ऋण क्या माना जाता है? डेट टू कैपिटल रेश्यो परिभाषा क्या है? अनुपात विश्लेषण परिचय।
अच्छे या बुरे गियरिंग अनुपात और उत्तोलन अनुपात के रूप में क्या माना जाता है?
उत्तोलन अनुपात हिंदी में.
![[SUB] 베몬이 교관님 멘탈을 탕탕 후루후루~٩(๑❛ᴗ❛๑)۶ FOREVER 웃게 되는 갓기들의 수련회 | 돌들의침묵 | BABYMONSTER(베이비몬스터) 'FOREVER'](http://i.ytimg.com/vi/FISAO7BwIxE/mqdefault.jpg)
It’s grt Ankush, we r working in this field since last 14 years but didn’t get the time or u can say didn’t have that passion to try to help others. I also started as a fresher and didn’t have this kind of stuff and have learned on my own. But for current people this is just gold. Keep up Buddy 👍. Would like to contribute in any manner I can, if u permit.
Thank you Vikas ji. If this channels reaches all needy ones then it will be biggest contribution for our society.
Sir don't take any tension after few days your channel become 2-3 million subscribers
Thank you 😊
Respected sir
you are doing a great job by making such videos.
I am also the fresher in banking industry and I am finding your videos of great help for accessing loan files.
Thanks a lot🙏
Thank you
CMA prepration video help me a lot as i am CA and working with project finance
Thank you
Hello dear.... I got your reference from one of my colleagues... really concept clarity is at another level....god bless you..... please always spread financial awareness in such a way....
Regards
Ankur saxena
Chief Manager
PNB
Thank you 😊
Great jain sir
Thank you
Very nicely explained Sir😊
Thank you
Thanks Sir very nicely explained
Thank you
Best of the best knowledge sharing session..!!
Thank you
Really , too much useful for me as I am working in finance industry
👍
This is help us a lot but some tym we aren't comments do only like. So keep posting sir ji
👍👍
Outstanding 👍
Thank you
Its really nice Sir…i really enjoyed watching your video…please keep posting❤❤❤❤❤❤❤
Thank you 🎉
Sir truly truly awesome and this type of concept and approach is never seen it shows the real picture of business and the intent of the owner also thanks a lot sir
Thank you
Very knowledgeable vedio thanks
Your welcome 👍
Thank you for your support 🙏
Your welcome
Thank you sir...ek realistic way of seeing balance sheet and formulas bata diya aapne 🙂🙂🙂
Thank you 👍
U are great Ankush ji bahut acche se samjhate hai
Thank you
Sir, apki trick ekdam badhiya he samjane ki, maja aa gaya, books me formula dekh ke padhe usme koi knowledge nahi milta he, is me apne practically bahut badhiya samajaya..Thanks you sir.🙏.Aap aese hi video banate raho to vo hamare liye bahot hi achha he jo dusre se aisa kabhi knowledge nai milega..Dhnyavad sir..i want to learn all ratio analyasis from your chanel so pls provide me video as possible.
Thank you 👍
outstanding......
Thank you
Very fruitful 🙏
Thank you
Excellent sir
Thank you
Great work sir
I'm planning to start my own startup your financial video are really useful kindly please also start making financial basic of startup video
Thank you
Sir Great Job!
Thank you
Very good explanation 👏
Thank you
Thank you so much for Such video Sir
Your welcome
First time learning ratios was interesting
Thank you 👍
Thanks a lot sir
👍 your welcome
Thnk u soo much sir... video helps me alotss
Your welcome 😊
What is capital employed and explain the formula of Return on capital employed.
Will make a video
Thank You Sir!!!!🙏
👍
Sir ji great 👍 experience❤
Thank you
Very nice 👍
Thank you
Very nice sir
Thank you Ajay
Thank you so much sir 🙏
Your welcome
Sir, gearing ratio 3:1 hamari funding dene ke bad itni honi chahiye?? Ya funding se pehle 3:1 honi chahiye??
Funding k baad
Yes
Sir kindly make one video on HOW TO READ CIBIL REPORT OF INDIVIDUAL AND ENTITY
Ok will do
Should we reduce Loan and advance given to employees also from ATNW?
No it is not diversion
plz make a video on how to improve financial ratios so that we can perform well in interview.
Methods to improve are incorporated in the videos itself. Pl refer this playlist
th-cam.com/play/PLjlclsu02a_z210w1g5SBcZLMGOK4QaQm.html
Thank you sir... Could you please make a video on cash flow and fund flow?
Yeah sure. Not an issue
@@AnkushJain thank you🙏🙏
👍
Hi sir
While calculation leverage ratio, do we consider credtiors amount in TOL ?
Yes
Ap Video dekh kar 1/2 Sal me credit Manager ban jayenge...apke Video dekh kar mai retail banking Liability se Business Banking Asset me moove kar liya hun thanks 🙏
Thank you 👍
Sir, channel finance bhi add hoga interest bearing debt me???
Yes
What about short term interest bearing USL from friends and family . It is a part of TNW of it should be added with the short term / long term interest bearing loans?
If they are long term in nature then they are part of capital and not debt
And if they are for short term interest bearing loans, then what? Will it be the part of TOL or should we ignore ?
Sir member wala videos ko general public k liya unlock kar do
@@Commerceconcept666 vo option nhi hai.. aap membership le lo.. 199 per month manageable hai agar aap self earning kr rhe ho job ya business se
M apply karna Chata hu membership k liya but option show kha se hoga
@@Commerceconcept666
th-cam.com/channels/E4CwHclbqMgdYCH6lDQmDA.htmljoin
Joining link 👆
@@AnkushJaintx
👍👍
Sir, unsecured loan taken from relative in which interest to be paid , in this case what we do, should we treat as interest bearing debt or treated as ATNW
This is your call.. if treated as quasi equity then treat them as part of atnw
Sir, there's one interview question:
If Debt to Equity is 5:1 and all debts include loans from related parties. Would the Bank provide Working Capital to such a customer?
Request your guidance.
Yeah if those debts are quasi in nature then we can consider them part of capital and therefore debt equity ratio can become comfortable
@@AnkushJain thank you Sir Ji 🙏
👍👍
Sir ye CMA report Term loan, project finance and working capital loan in sabhi ke liye bnana pdta h ya only wc finance ke liye?
Sabke liye
@@AnkushJain thankyou sir
Sir we will also add goodwill , revaluation reserves for atnw
They shall be deducted from atnw
ATNW me investment in subsidiary/loans given under assets side will be deducted
Yes since they are not invested in business
Will we decuct Investment in property from loan and advances for which loan has been taken as mentioned in liability side
Investment in property where you are able to identify source of finance specifically in balance sheet, need not to be included in advances i.e. no need to consider it as diversion of capital
Even If this property is taken for residential propose then we will not consider it as diversion
@@AnkushJain can you explain why we would not consider it as diversion beacuse resdidential property is not use for business purpose
Pl rethink again. What is diversion of funds? Diversion of funds means your capital is invested in non operating assets. In other words, to invest in non operating asset you have raised funds from your own capital. But if in case, on liab. Side you have specific bank loan appearing which you know is specifically invested in a particular asset. Then how can we consider it as diversion of funds?
@@AnkushJain It means if loan is taken on business name then it is use for business like resi cum office
sir solvency ratio is similar to promoters margin in business
Yeah related to it
Sir, Got Good Marks in Jaaib 2nd Paper. Thanks a lot. Now, I think 3rd Paper Wala Syllabus bhi Aap Padhaiye
Oh, i don't even know the syllabus of 2nd paper. Does any topic of it was covered in my videos?
@@AnkushJain Sir, Letter of Credit, Bank Guarantee, Ratio, Working Capital etc...as many questions are found relatable. LC Limit Calculation direct question. Paper 2 Name is Finance and Accounting Aspects in Banking.
Ok 👍
Sir you can surely teach by having videos for JAIIB and caiib syllabus
Sir, we check EMI with EBITDA or cash profits?
Should be checked with EBITDA
@@AnkushJain why sir? Cash profits are the actual ones, and depicts factual paying capacity of client.
Your emi includes interest also while cash profits are post deduction of interest. Therefore there will be mismatch in numerator and denominator as numerator which is cash profit are post deduction of interest while in denominator which is emi include interest also. So if you want to consider only cash profit then only consider principle portion of emi in denominator to get accurate results
Sir agar mein subscription leta hun to jo old class hai wo dekne ko milengi
Yes
Will all intangible (including software) be deducted from net worth for TNW or not
Not all intangible assets. Software has a cost therefore should not be deducted
@@AnkushJain thanks actually this is asked in interview and i have same view so i just want to confirm with u
Yeah it's fine 😊👍
Intangible assets for which expenses are booked in PNL should not be deducted from TNW ?
Sir ye capital infusion practically kaise hota hai, please ise bataiye
Client puts money from his saving account to current or limit account of the firm. Bank check the entry and also takes certificate from client CA that so and so infusion has been done
@@AnkushJain thank you sir
👍
Sir so open kha se hogi
@@Commerceconcept666
th-cam.com/channels/E4CwHclbqMgdYCH6lDQmDA.htmljoin
Joining link for membership
Sir what is the main difference between D/E ratio and TOL/TNW
One is gearing and other one is leverage.. both of them explained in this video itself
It means D/ E means gearing ratio and TOL/TNW means leverage ratio
Yes
Please reply Because i am interested to buy ttml shere
Replied
Sir, we can improve, debt equity ratio but can we improve DSCR
Only if projections are positive
Ok sir, thanks
Sir dono ratio me means aapki jo equity hai wo kam honi chaiye yaa jada yaa equal samajh me nhi aaya
Jitni equity jyada hogi utni ratio achi bnegi
Ok sir
👍👍
Dear sir, if possible make videos no. 58 & 59 available with high resolution(480,720) so that we can download them in high quality.
Ok will check about it
@@AnkushJain
I have tried but it is available for up to 360 quality only.
Are you watching it over Laptop or TV?
I had checked but resolution was maximum on my screen recording software. Don't know why it is SD quality
@@AnkushJainNormally I download it first through the snaptub app on mobile and then I watch it on my laptop.
Hello sir, if any firm is having a very bad debt to equity ratio, than in this situation, should i take a call on this case or directly reject it?
Please suggest
How much is the loan amount and whether case is ok in all the rest analysis checks?
The case is ok in other parameters. If i take a call on this case then what should the mitigants.
Let say, if debt to equity is 6 times then what are other ratios i need to calculate to mitigate this?
Mainly take call on turnover, banking conduct, cibil conduct, collateral cover should be good and quality of collateral should also be good. Mpbf norms should meet and debt to equity in projections will come down with retained profits
Ok sir thanks a lot 😊
👍👍
Sir, ..let's say I'm doing a case of proprietorship ... and I come across an investment in gold by him . Which is shown in balance sheet.....
So, should I deduct that investment from his capital to arrive at right amount of capital invested In his firm?
In my opinion deduction of any investment from capital will depend on what kind of capital there in the firm
For example, if capital includes only fixed investments like goods carrier , storage house or furniture , then it doesn't make sense to deduct gold investment from the firm's capital
But if the capital includes cash also , then it makes sense to do so
Please sir, inform me what you think about it...
Thanks 😊
To state your answer practically, it is your call. If you think that overall case is doable then you just treat gold as normal cash and cash equivalent and don't deduct from capital but if you are having overall negative opinion on the case then deduct from capital
@@AnkushJain ye sahi tha..😄
Yeah that's how we actually work right ☺️
Case: A&B are the Group firms.
A has lent Rs 100 to B.
Treatment is given in CMA:
A:
While arriving at tangible net worth/adjusted net worth, Rs 100 is deducted as it is considered an advance including ICD(inter-company deposits). This adjusted net worth is considered while calculating the D/E ratio & TOL/TNW ratio.
B:
While calculating net worth, Rs.100 is considered as quasi-equity.
Is this the right treatment according to you sir?
Yes, if you treating it as diversion in one firm then you will have to consider it as quasi equity in another.
Total net effect will be nil at group level.
This is helpful only when you are finding both the group firms. If you are funding only A, then your ratio will deteriorate and if you are funding only B then you might want to cross check whether the advance to be considered as quasi or not
Thanks a lot sir
Lot more information got
Your welcome