Tangible Common Equity
Tangible Common Equity (TCE) refers to the subset of shareholders' equity that is not preferred equity and not intangible assets.
TCE is an uncommonly used measure of a company’s financial strength. It indicates how much ownership equity owners of common stock would receive in the event of a company’s liquidation. During the financial and economic crisis of 2008-2009, it gained public popularity as a measure of the viability of large commercial banks.
TCE, when used in a ratio with tangible common assets, is a measure of a bank's ability to absorb losses (e.g., homeowners defaulting on mortgages) before becoming insolvent. It is one of the factors considered by the Office of the Comptroller of the Currency to determine if a bank has become insolvent.
Read more about Tangible Common Equity: Formulae, See Also, Example
Famous quotes containing the words tangible, common and/or equity:
“It is only in the act of nursing that a woman realizes her motherhood in visible and tangible fashion; it is a joy of every moment.”
—Honoré De Balzac (1799–1850)
“Man that is born of woman hath but a short time to live, and is full of misery. He cometh up, and is cut down, like a flower; he fleeth as it were a shadow, and never continueth in one stay.”
—“Burial of the Dead,” first anthem, Book of Common Prayer (1662)
“If equity and human natural reason were allowed there would be no law, there would be no lawyers.”
—Christina Stead (1902–1983)