Ratio Theories

Liquidity Ratio

The Liquidity ratio is made up of two primary account totals; it measures the percentage of Total Cash and Marketable Assets divided by Total Deposits and Short Term Liabilities.

The Liquidity ratio is a current month ratio, reporting largely of G/L balances and current item balances such as Credit  Lines and Constants.

Dependency Ratio

The Dependency ratio measures an institution's ratio of volatile liabilities against earning assets.  Several already defined components are reused, along with line item calculations to obtain respective subtotals.

All volatile liabilities are reduced by any Short Term Assets that would typically be used to cover some of the liabilities.  By definition, Earning Assets include all earning assets, including the Short Term Assets.  Since the Short Term Assets are usually committed against liabilities, they are subtracted from Earning Assets, therefore not counting them as Earning Assets.

Just as with the Liquidity ratio, the Dependency ratio is a current month ratio, reporting of G/L balances along with current item balances such as Credit Lines and Constants.

Sources and Uses Proj Volumes

The Sources and Uses Proj Volumes ratio/report will show the institution's projected outflows vs. inflows  of volumes (sources and uses) over the next 24 month projection periods.  It is based upon the Shock Income data and can be reported for each shock scenario. The Net Funds should always equal 0, as the model balances to the Fed Funds accounts.  If Net Funds does not equal zero, it indicates the components or setup of the ratio is not properly defined.

Sources and Uses Proj Available Funds

The Sources and Uses Proj Available Funds ratio/report, will show the monthly and cumulative available funds position over the next 24 months.  Results are based upon the Shock Income data and can be reported for each shock scenario.