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Calculating Ratios: TCE and Leverage

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April 23, 2009 – Comments (1) | RELATED TICKERS: C

I found the correct, rigorous equations to calculate these ratios, for those who are following the bank meltdown.

First concept is Tangible Common Equity (TCE):

TCE = total equity - intangibles - preferred stock equity

(note: TMF’s “intangibles” = intangible equity + goodwill) So:

TCE ratio = TCE / total assets

Leverage ratio = (total assets - intangibles) / TCE

Doing the math for C, I get:

TCE ratio = 1.3%

Leverage ratio = 76

 

1 Comments – Post Your Own

#1) On April 24, 2009 at 12:02 AM, goldminingXpert (29.76) wrote:

Oh boy. That's nuts.

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