Tangible Common Equity Ratio - TCE
Definition of 'Tangible Common Equity Ratio - TCE'A ratio used to determine how much losses a bank can take before shareholder equity is wiped out. The Tangible Common Equity (TCE) ratio is calculated by taking the value of the company's total equity and subtracting intangible assets, goodwill and preferred stock equity and then dividing by the value of the company's tangible assets. Tangible assets is the company's total assets less goodwill and intangibles. |
|
Investopedia explains 'Tangible Common Equity Ratio - TCE'This ratio became popular when evaluating banks during the credit crisis in 2008. Its conservative approach has made it a very risk free way for investors to evaluate worst case scenarios of their investments. |
Related Definitions
Articles Of Interest
-
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Can You Count On Goodwill?
Carefully examine goodwill and its sources before considering the value of your investment. -
Intangible Assets Provide Real Value To Stocks
Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value. -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Investing During Uncertainty
The inability to forecast future events can turn the markets upside down. Find out how to stay right-side up. -
Why High-Income Earners Are Not Safe From The Threat Of Bankruptcy
Few people have much sympathy for the woes of those earning six figure or more each year. But, given that high-income earners drive economic expansion, the risks and problems facing high earners ... -
5 Businesses That Started During A Recession
These companies found success despite being started during economic downturns. -
Understanding Off-Balance Sheet Financing
For anyone who was invested in Enron, off-balance sheet (OBS) financing is a scary term. Off-balance sheet financing means a company does not include a liability on its balance sheet. It is ... -
What Causes A Currency Crisis?
Find out what can cause a currency to collapse, and what central banks can do to help.
Free Annual Reports