Balance-sheet management: Difference between revisions
WikiSysopIG (talk | contribs) Created page with "'''Balance-sheet management''' is the process of managing an organization's balance-sheet structure, including its assets, liabilities, and equity, to support financial objectives while maintaining appropriate levels of liquidity, capital, profitability, and financial risk. Balance-sheet management involves decisions concerning the composition, maturity, funding, valuation, and allocation of assets and liabilities. It is pa..." |
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''' | '''Balance-sheet management''' is the process of managing an organization's [[Balance sheet|balance-sheet]] structure, including its assets, liabilities, and [[Shareholders' equity|equity]], to support financial objectives while maintaining appropriate levels of liquidity, capital, profitability, and financial risk. | ||
Balance-sheet management involves decisions concerning the composition, maturity, funding, valuation, and allocation of assets and liabilities. It is particularly important for [[Bank|banks]] and other financial institutions, but is also relevant to non-financial companies. | Balance-sheet management involves decisions concerning the composition, maturity, funding, valuation, and allocation of assets and liabilities. It is particularly important for [[Bank|banks]] and other financial institutions, but is also relevant to non-financial companies. | ||
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* assets; | * assets; | ||
* liabilities; | * liabilities; | ||
* shareholders' equity. | *shareholders' equity. | ||
The fundamental accounting relationship is: | The fundamental accounting relationship is: | ||
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* committed credit facilities; | * committed credit facilities; | ||
* funding diversification; | * funding diversification; | ||
* maturity management. | *maturity management. | ||
A simplified liquidity position can be expressed as: | A simplified liquidity position can be expressed as: | ||