kapitaalkracht

Kapitaalkracht is a Dutch term that denotes the financial strength or capital adequacy of an organization, with emphasis on its ability to absorb losses and continue operations in adverse conditions. The concept combines a firm’s equity, reserves, and access to financing to indicate the overall robustness of its financial position.

In banking and corporate finance, kapitaalkracht is often assessed through capital adequacy indicators. For banks, regulators use capital ratios such as common equity tier 1 (CET1) and total capital ratio to gauge kapitaalkracht and compliance with prudential requirements. A higher level of kapitaalkracht suggests greater resilience to shocks and losses.

In corporate finance, kapitaalkracht reflects how well a company can fund investments, cover unexpected losses, and maintain growth through retained earnings or new capital. It influences creditworthiness, lending terms, and investor confidence.

Determinants include profitability and earnings retention, asset quality, leverage, and access to capital markets, as well as regulatory capital requirements. External circumstances, such as economic cycles and interest rates, also affect kapitaalkracht.

Limitations of the concept arise from accounting rules and risk weighting, which can vary across jurisdictions and over time. Therefore, comparisons of kapitaalkracht should rely on standardized metrics and contemporaneous data.

See also: solvency, capital adequacy, capitalization, financial strength.