On the correlation between financial ratios and capital adequacy across banking network (The Case of Banks Article 44)

Journal Title: International Research Journal of Applied and Basic Sciences - Year 2015, Vol 9, Issue 3

Abstract

Capital adequacy ratio is considered as the fundamental criteria of evaluating the financial status of banks. Such a ratio is probably affected by other financial variables of bank and certainly affects these variables leading to overall behavior of bank. The financial health of banks as well as credit and financial institutes play a great role in developing and economic stability where the capitals of banks have a considerable impact on the competitive status of bank. The aim of the present study is to make analysis on the financial ratios effect on banks adequacy ratio in Iran stock exchange. In so doing, the study made use of the financial data of 13 active banks in Tehran stock exchange through employing data panel regression method. The results of the stud indicated that the ratio of deposits to overall capital, financial leverage, bank and the ratio of facilities to overall capitals did not gave a significant relationship with capital adequacy. Also, the results manifested that there was a significant relationship between capitals return and returns on shareholders' rights with capitals adequacy rate.

Authors and Affiliations

Mehran Molavi| Department of Public Administration, Mahabad Branch, Islamic Azad University, Mahabad, Iran email: Dr-molavi1967@yahoo.com, Shilan Jamalzade| Department of Public Administration, Mahabad Branch, Islamic Azad University, Mahabad, Iran

Keywords

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  • EP ID EP6948
  • DOI -
  • Views 360
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How To Cite

Mehran Molavi, Shilan Jamalzade (2015). On the correlation between financial ratios and capital adequacy across banking network (The Case of Banks Article 44). International Research Journal of Applied and Basic Sciences, 9(3), 401-406. https://www.europub.co.uk/articles/-A-6948