A measure of a bank's capital.

It is expressed as a percentage of a bank's risk weighted credit

exposures.

Also known as "Capital to Risk Weighted Assets Ratio (CRAR)."

Capital Marketing is committed to establishing positive long-term working relationships  

          with businesses, developing innovative promotional marketing strategies and accomplishing
marketing goals  
          to enhance each client's image and business.

What Does Liquidity Mean?

1. The degree to which an asset or security can be bought or sold in the market without affecting the
asset's price. Liquidity is characterized by a high level of trading activity. Assets that can by easily bought
or sold, are known as liquid assets.

2. The ability to convert an asset to cash quickly. Also known as "marketability".

There is no specific liquidity formula, however liquidity is often calculated by using liquidity ratios.

What Does Disinvestment Mean?

1. The action of an organization or government selling or liquidating an asset or subsidiary. Also
known as "divestiture".

2. A reduction in capital expenditure, or the decision of a company not to replenish depleted

capital goods.

Investopedia explains Disinvestment

1. A company or government organization will divest an asset or subsidiary as a strategic move
for the company, planning to put the proceeds from the divestiture to better use that garners
a higher return on investment.

2. A company will likely not replace capital goods or continue to invest in certain assets unless it
feels it is receiving a return that justifies the investment. If there is a better place to invest, they
may deplete certain capital goods and invest in other more profitable assets.
Alternatively a company may have to divest unwillingly if it needs cash to sustain operations.
Related Terms

 Capital Expenditure - CAPEX

 Capital Goods
 Divestiture
 Return On Assets - ROA
 Return On Equity - ROE
 Return On Investment - ROI
 More Related Terms

What Does Ratio Analysis Mean?

A tool used by individuals to conduct a quantitative analysis of information in a company's
financial statements. Ratios are calculated from current year numbers and are then compared to
previous years, other companies, the industry, or even the economy to judge the performance of
the company. Ratio analysis is predominately used by proponents of fundamental analysis.

Investopedia explains Ratio Analysis

There are many ratios that can be calculated from the financial statements pertaining to a
company's performance, activity, financing and liquidity. Some common ratios include the price-
earnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.

What Does Derivative Mean?

A security whose price is dependent upon or derived from one or more underlying assets. The
derivative itself is merely a contract between two or more parties. Its value is determined by
fluctuations in the underlying asset. The most common underlying assets include stocks,
bonds, commodities, currencies, interest rates and market indexes. Most derivatives are
characterized by high leverage. 

A forward contract is a private contract between a buyer and a seller in which the buyer agrees to buy
and the seller agrees to sell a specific quantity of a certain security or commodity (known as the
underlying instrument) at the price specified in the contract. The difference between a forward contract
and most other sales contracts is that with the forward contract, the delivery and payment of the
underlying instrument occurs at a specified future date instead of immediately. Let’s take a look at an
example.
What Does Volatility Mean?
1. A statistical measure of the dispersion of returns for a given security or market index.
Volatility can either be measured by using the standard deviation or variance between returns
from that same security or market index. Commonly, the higher the volatility, the riskier the
security.

2. A variable in option pricing formulas showing the extent to which the return of the underlying
asset will fluctuate between now and the option's expiration. Volatility, as expressed as a
percentage coefficient within option-pricing formulas, arises from daily trading activities. How
volatility is measured will affect the value of the coefficient used.