Principles for Responsible Banking and Quick ratio: Difference between pages

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''Environmental social and governance (ESG) - banking.''
''Financial ratio analysis - liquidity ratios.''


(PRB).
(Current assets <i>less</i> Inventories) / Current liabilities.


The Principles for Responsible Banking are a framework for ensuring that signatory banks’ strategy and practice align with the UN's Sustainable Development Goals (SDGs) and the Paris Climate Agreement.
The quick ratio gives a very rough indication of the liquidity (or solvency) of the reporting entity.<br />
If the quick ratio were to fall below 1.0, this would indicate that the entity would not be able to meet its current liabilities out of its cash in hand and the proceeds of its other current assets (excluding inventories).




:Signatories commit themselves to:
<b>Example</b><br />
Current assets (excluding inventories) = £3m. <br />
Current liabilities = £4m. <br />


#'''Align''' their business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.
The Quick ratio is: <br />
#Continuously increase their positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from their activities, products and services. To this end, to set and publish '''targets''' where they can have the most significant '''impacts'''.
= 3 / 4 <br />
#Work responsibly with '''clients and customers''' to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.
= 0.75.
#Proactively and responsibly consult, engage and partner with relevant '''stakeholders''' to achieve the SDGs and the goals in the Paris Agreement.
#Implement their commitment to these Principles through effective '''governance''' and a '''culture''' of responsible banking.
#Periodically review their individual and collective implementation of these Principles and be '''transparent''' about and '''accountable''' for their positive and negative impacts and their contribution to the goals.


::''Source - United Nations Environment Programme Finance Initiative''


The quick ratio is also known as the Acid test or the Acid test ratio.<br />
Inventories are sometimes also known as Stock.


==See also==
*[[Environmental concerns]]
*[[Equator Principles]]
*[[European Bank for Reconstruction and Development]]
*[[ESG investment]]
*[[Net-Zero Banking Alliance]]
* [[Organisation for Economic Co-operation and Development]]  (OECD)
*[[Paris Agreement]]
*[[Principles for Responsible Investment]] (PRI)
*[[Principles for Sustainable Insurance]] (PSI)
*[[Project finance]]
*[[Risk management]]
*[[Social concerns]]
*[[Sustainable Development Goals]]
*[[United Nations Environment Programme]]
*[[United Nations Environment Programme Finance Initiative]]


 
== See also ==
==External link==
* [[Balance sheet ratio]]
[https://www.unepfi.org/banking/bankingprinciples/ Principles for Responsible Banking - UN Environment Programme]
* [[Current assets]]
* [[Current liabilities]]
* [[Current ratio]]
* [[Inventory]]
* [[Liquidity]]
* [[Liquidity ratio]]
* [[Stock]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Compliance_and_audit]]
[[Category:Liquidity_management]]
[[Category:Ethics]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Latest revision as of 19:09, 3 February 2019

Financial ratio analysis - liquidity ratios.

(Current assets less Inventories) / Current liabilities.

The quick ratio gives a very rough indication of the liquidity (or solvency) of the reporting entity.
If the quick ratio were to fall below 1.0, this would indicate that the entity would not be able to meet its current liabilities out of its cash in hand and the proceeds of its other current assets (excluding inventories).


Example
Current assets (excluding inventories) = £3m.
Current liabilities = £4m.

The Quick ratio is:
= 3 / 4
= 0.75.


The quick ratio is also known as the Acid test or the Acid test ratio.
Inventories are sometimes also known as Stock.


See also