The widely used parameters within CAMELS Model
| CAMELS parameters | CALCULATION | literature (source) |
|---|---|---|
| Capital adequacy | Capital Adequacy Ratio (CAR) = BASEL Ratio | (Altan et al., 2014; Wanke et al., 2016; Karim et al., 2018) |
| Assets quality | Asset Quality (AQ) = Gross nonperforming financing ratio | (Sahut and Mili, 2011; Altan et al., 2014; Lahrech et al., 2014; Alqahtani et al., 2017) |
| Management | Management (MAN) = Cost to Income | (Dincer et al., 2011; Peltonen et al., 2015; Alqahtani et al., 2017; Munir et al., 2017) |
| Earnings | Return on assets (ROA) | (Dincer et al., 2011; Wanke et al., 2016; Alqahtani et al., 2017; Karim et al., 2018) |
| Return on equity (ROE) | ( Dincer et al., 2011; Altan et al., 2014; Lahrech et al., 2014; Peltonen et al., 2015; Munir et al., 2017; Karim et al., 2018) | |
| Net profit margin (NPM) | (Altan et al., 2014; Wanke et al., 2016; Karim et al., 2018) | |
| Liquidity | Liquidity assets ratio (LIQ) | (Dincer et al., 2011; Altan et al., 2014; Lahrech et al., 2014; Peltonen et al., 2015; Alqahtani et al., 2017; Karim et al., 2018) |
| Sensitivity to market risk | Sensitivity to market risks (SEN) = Net foreign exchange (FX) open position to capital | (Gasbarro et al., 2002; Dincer et al., 2011; Roman and Şargu, 2013; Erol et al., 2014; Hofstetter et al., 2018; Karim et al., 2018) |
| CAMELS parameters | CALCULATION | literature (source) |
|---|---|---|
| Capital adequacy | Capital Adequacy Ratio (CAR) = BASEL Ratio | ( |
| Assets quality | Asset Quality (AQ) = Gross nonperforming financing ratio | ( |
| Management | Management (MAN) = Cost to Income | ( |
| Earnings | Return on assets (ROA) | ( |
| Return on equity (ROE) | ( | |
| Net profit margin (NPM) | ( | |
| Liquidity | Liquidity assets ratio (LIQ) | ( |
| Sensitivity to market risk | Sensitivity to market risks (SEN) = Net foreign exchange (FX) open position to capital | ( |
Source(s): Retrieved from the literature
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