The phrase "tangible capital" is correct and commonly used in written English.
It refers to physical assets or resources that can be seen, touched, and measured, such as equipment, property, and inventory. Example: The company's success can be attributed to its strong tangible capital, including modern machinery and a large inventory of raw materials.
Property also makes up around two-thirds of the tangible capital stock in most economies.
Within these categories are various subcategories, including Tier 1 capital, tangible capital, and total capital.
But it would be far better to keep a closer eye on banks and force them to match their tangible capital with their risk-taking appetite.
As Clark B. Hinckley, a Zions senior vice president, told me, "It enabled us to essentially originate these loans and not have to keep tangible capital behind them".
In Europe, "banks exceed minimum capital levels, but would benefit from additional tangible capital to better absorb impending losses and revive lending," the I.M.F.
As recently as 2007, Lehman had reported record profits, thanks largely to its leverage of thirty to one, meaning that for every dollar of tangible capital it had thirty dollars of debt.
When companies reach a certain size, most entrepreneurs use charitable donations to convert tangible monetary capital into relational social capital, cultural capital that embodies entrepreneurship, or symbolic capital that implies status and prestige (Brooks 2006).
The result was an increase in tangible equity capital from $42.7 billion in 2007 to $64.2 billion in 2008.
This is a way of looking at the operating profits earned on tangible investment capital, or the assets used by the company to produce that profit.
The classic version of the Texas ratio requires the investor to divide the bank's total nonperforming assets (NPAs), including loans more than 90 days delinquent, by the sum of the company's tangible equity capital and loan loss reserves.
Regulators are doing the right thing by increasing tangible equity capital requirements and focusing on balance sheets that are funded by longer-term core deposits and debt to avoid the risks inherent in short-term funding that exacerbated the financial meltdown in 2008.
