DEFINITION of 'RiskAdjusted Capital Ratio'
A measure of a financial institutions that compares total adjusted capital (TAC) to the institutions riskweighted assets. There are many variations of riskadjusted capital ratios, depending on how the analyst defines capital. Riskadjusted capital ratios are used to assess the capital adequacy of a financial institution. Analyzing these ratios can help determine whether a bank has enough capital to withstand a downturn in the economy.
BREAKING DOWN 'RiskAdjusted Capital Ratio'
For instance, Standard and Poor's calculates adjusted common equity by taking common shareholder's equity, and adding minority interestequity and subtracting items such as dividends, revaluation reserves, goodwill, tax loss carry forwards, interestonly strips and other adjustments. Then, preferred stock and general reserves are added to this adjusted common equity to get their total adjusted capital.

Total AssetToCapital Ratio  ...
A leverage covenant placed on Canadian Institutions regulated ... 
Tier 1 Capital
A term used to describe the capital adequacy of a bank. Tier ... 
Capitalization Ratios
Indicators that measure the proportion of debt in a company’s ... 
Tier 1 Common Capital Ratio
A measurement of a bank's core equity capital compared with its ... 
Tier 1 Leverage Ratio
The relationship between a banking organization's core capital ... 
Capital Adequacy Ratio  CAR
A measure of a bank's capital. It is expressed as a percentage ...

Investing Basics
Explaining RiskAdjusted Return
Riskadjusted return is a measurement of risk for an investment or portfolio. 
Economics
Explaining RiskWeighted Assets
Riskweighted assets is a banking term that refers to a method of measuring the risk inherent in a bank’s assets, which is typically its loan portfolio. 
Economics
Calculating Tier 1 Common Capital Ratio
The tier 1 common capital ratio compares a financial institution’s core equity capital to its riskweighted assets. 
Term
How Equity Capital Markets Work
An equity capital market is a market existing between companies and financial institutions that raises money for the companies. 
Economics
What's Economic Capital?
While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures. 
Economics
Understanding Capital
Capital has a variety of meanings, but it generally refers to financial resources. 
Fundamental Analysis
Explaining Capital Employed
Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue. 
Technical Indicators
Key Financial Ratios to Analyze Investment Banks
Find out which financial ratios are most useful when analyzing an investment bank, and why tracking capital efficiency is especially important. 
Fundamental Analysis
Understanding the Capital Adequacy Ratio
The capital adequacy ratio (CAR) is an international standard that measures a bank’s risk of insolvency from excessive losses. Currently, the minimum acceptable ratio is 8%. Maintaining an acceptable ... 
Economics
Calculating Days Working Capital
A company’s days working capital ratio shows how many days it takes to convert working capital into revenue.

What measures can be used to evaluate the capital adequacy of a bank?
Examine some of the different financial measurements that are most commonly used to assess capital adequacy within the banking ... Read Answer >> 
What is the minimum capital adequacy ratio that must be attained under Basel III?
Find out more about the capital adequacy ratio, or CAR, and the minimum capital adequacy ratio that banks must attain under ... Read Answer >> 
How do I calculate the capital to risk weight assets ratio for a bank in Excel?
Learn more about the capital to riskweighted assets ratio and how to calculate a bank's capital adequacy ratio using Microsoft ... Read Answer >> 
What measures can be used to evaluate the capital adequacy of an oil and gas company?
Read about the measures that can be used to evaluate both the financial and physical capital adequacy of companies in the ... Read Answer >> 
What ratios are most commonly used to judge working capital management?
Learn about the various working capital ratios that investors and analysts consider when evaluating a company's financial ... Read Answer >> 
What is the difference between the capital adequacy ratio vs. the solvency ratio?
Understand the different applications for using the capital adequacy ratio and the solvency ratio, which are both equity ... Read Answer >>