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April 18, 2014   

PEARLS // Ratios

 
P - Protection Goals (Excellence)
1. Loan Losses Allowances / Delinq. >12 Mo. 100%
2. Net Loan Loss Allowances / World Council Allowance Required for Delinq. 1-12 Mo. 35%
3. Complete Loan Charge-off of Delinq. > 12 Mo. Yes
4. Annual Loan Charge-offs / Average Loan Portfolio Minimized
5. Accum. Charge-offs Recovered / Accum. Charge-offs > 75%
6. Solvency (Net Value of Assets/Total Shares & Deposits) ≥ 111%

E - Effective Financial Structure
Goals (Excellence)
1. Net Loans / Total Assets 70-80%
2. Liquid Investments / Total Assets ≤ 16%
3. Financial Investments / Total Assets ≤ 2%
4. Non-financial Investments / Total Assets 0%
5. Savings Deposits / Total Assets 70-80%
6. External Credit / Total Assets 0-5%
7. Member Share Capital / Total Assets ≤ 20%
8. Institutional Capital / Total Assets ≥ 10%
9. Net Institutional Capital / Total Assets ≥ 10%

A - Asset Quality
Goals (Excellence)
1. Total Loan Delinquency / Gross Loan Portfolio ≤ 5%
2. Non-earning Assets / Total Assets ≤ 5%
3. Net Zero Cost Funds / Non-earning Assets ≥ 200%

R - Rates of Return and Costs
Goals (Excellence)
1. Net Loan Income / Average Net Loan Portfolio Entrepreneurial Rate
2. Liquid Inv. Income / Avg. Liquid Investments Market Rates
3. Fin. Investment Income / Avg. Fin. Investments Market Rates
4. Non-fin. Inv. Income / Avg. Non-fin. Investments ≥ R1
5. Fin. Costs: Savings Deposits / Avg. Savings Deposits Market Rates > Inflation
6. Fin. Costs: External Credit / Avg. External Credit Market Rates
7. Fin. Costs: Member Shares / Avg. Member Shares Market Rates, > R5
8. Gross Margin / Average Assets ˆE9=10%
9. Operating Expenses / Average Assets ≤ 5%
10. Provisions for Risk Assets / Average Assets ˆP1=100%, ˆP2=35%
11. Other Income or Expense / Average Assets Minimized
12. Net Income / Average Assets (ROA)
ˆE9=10%

L - Liquidity
Goals (Excellence)
1. Liquid Assets - ST Payables / Total Deposits 15-20%
2. Liquidity Reserves / Total Savings Deposits 10%
3. Non-earning Liquid Assets / Total Assets < 1%

S - Signs of Growth (Annualized Rates)
Goals (Excellence)
1. Net Loans ˆE1=70-80%
2. Liquid Investments ˆE2 ≤ 16%
3. Financial Investments ˆE3 ≤ 2%
4. Non-financial Investments ˆE4=0%
5. Savings Deposits ˆE5=70-80%
6. External Credit ˆE6=0-5%
7. Member Shares ˆE7 ≤ 20%
8. Institutional Capital ˆE8 ≥ 10%
9. Net Institutional Capital ˆE9 ≥ 10%
10. Membership ≥ 15%
11. Total Assets > Inflation + 10%


ˆ Amount Needed