+Annex 3 — Metrics for credit granting and monitoring
---+1. Loan to income
---+2. Loan service to income
---+3. Debt to income
---+4. Debt service to income
---+5. LTV B. Lending to micro, small, medium-sized and large enterprises
---+6. Equity ratio (shareholders’ equity divided by total assets)
---+7. (Long-term) debt-to-equity ratio
---+8. EBITDA
---+9. Debt yield (net operating income/loan amount)
---+10. Interest bearing debt/EBITDA
---+11. Enterprise value (sum of market value of common stock, market value of preferred equity, market …
---+12. Capitalisation rate (net operating income/market value)
---+13. Asset quality
---+14. Total debt service coverage ratio (EBITDA) over total debt service
---+15. Cash debt coverage ratio (net cash provided by operating activities over the average current …
---+16. Coverage ratio (total current assets divided by total short-term debt)
---+17. Future cash flow analysis
---+18. Return on assets
---+19. Debt service
---+20. Loan to cost (LTC)
---+21. Interest coverage ratio
---+22. Return on equity ratio (net income after interest and tax over average shareholders’ equity)
---+23. Return on capital employed
---+24. Net profit margin
---+25. Turnover evolution C. Real estate development lending
---+26. Fixed-assets-to-equity ratio
---+27. LTV
---+28. Location and quality of properties
---+29. LTC
---+30. DSCR for CRE activities
---+31. Occupancy rates evolution Profitability
---+32. Rental income to CRE-related interest expenses D. Leveraged finance, asset-based lending and …
---+33. Value of acquisition goodwill
---+34. Ring-fencing
---+35. LTV
---+36. Adherence to business plan
---+37. Leverage ratio (total debt over EBITDA)
---+38. Repayment capacity E. Shipping finance
---+39. Leverage ratio
---+40. Rating
---+41. Repayment from operating cash flow
---+42. Repayment from guarantor
---+43. Repayment from vessel’s sale
---+44. Outstanding payments

Annex 3 — Metrics for credit granting and monitoring

This annex provides a set of credit-specific metrics to be considered by institutions and creditors when performing creditworthiness assessments and credit risk monitoring, in accordance with these guidelines. Where relevant and more appropriate, institutions and creditors may use other metrics for that purpose.

A. Lending to consumers

1. Overview

Summary	Regulation
1. Loan to income	Loan to income
2. Loan service to income	Loan service to income
3. Debt to income	Debt to income
4. Debt service to income	Debt service to income
5. LTV B. Lending to micro, small, medium-sized and large enterprises	LTV B. Lending to micro, small, medium-sized and large enterprises
6. Equity ratio (shareholders’ equity divided by total assets)	Equity ratio (shareholders’ equity divided by total assets)
7. (Long-term) debt-to-equity ratio	(Long-term) debt-to-equity ratio
8. EBITDA	EBITDA
9. Debt yield (net operating income/loan amount)	Debt yield (net operating income/loan amount)
10. Interest bearing debt/EBITDA	Interest bearing debt/EBITDA
11. Enterprise value (sum of market value of common stock, market value of preferred equity, market …	Enterprise value (sum of market value of common stock, market value of preferred equity, market value of debt, minority interest, less cash and investments)
12. Capitalisation rate (net operating income/market value)	Capitalisation rate (net operating income/market value)
13. Asset quality	Asset quality
14. Total debt service coverage ratio (EBITDA) over total debt service	Total debt service coverage ratio (EBITDA) over total debt service
15. Cash debt coverage ratio (net cash provided by operating activities over the average current …	Cash debt coverage ratio (net cash provided by operating activities over the average current liabilities of the company within a certain period of time)
16. Coverage ratio (total current assets divided by total short-term debt)	Coverage ratio (total current assets divided by total short-term debt)
17. Future cash flow analysis	Future cash flow analysis
18. Return on assets	Return on assets
19. Debt service	Debt service
20. Loan to cost (LTC)	Loan to cost (LTC)
21. Interest coverage ratio	Interest coverage ratio
22. Return on equity ratio (net income after interest and tax over average shareholders’ equity)	Return on equity ratio (net income after interest and tax over average shareholders’ equity)
23. Return on capital employed	Return on capital employed
24. Net profit margin	Net profit margin
25. Turnover evolution C. Real estate development lending	Turnover evolution C. Real estate development lending
26. Fixed-assets-to-equity ratio	Fixed-assets-to-equity ratio
27. LTV	LTV
28. Location and quality of properties	Location and quality of properties
29. LTC	LTC
30. DSCR for CRE activities	DSCR for CRE activities
31. Occupancy rates evolution Profitability	Occupancy rates evolution Profitability
32. Rental income to CRE-related interest expenses D. Leveraged finance, asset-based lending and …	Rental income to CRE-related interest expenses D. Leveraged finance, asset-based lending and project finance
33. Value of acquisition goodwill	Value of acquisition goodwill
34. Ring-fencing	Ring-fencing
35. LTV	LTV
36. Adherence to business plan	Adherence to business plan
37. Leverage ratio (total debt over EBITDA)	Leverage ratio (total debt over EBITDA)
38. Repayment capacity E. Shipping finance	Repayment capacity E. Shipping finance
39. Leverage ratio	Leverage ratio
40. Rating	Rating
41. Repayment from operating cash flow	Repayment from operating cash flow
42. Repayment from guarantor	Repayment from guarantor
43. Repayment from vessel’s sale	Repayment from vessel’s sale
44. Outstanding payments	Outstanding payments

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

Requirements
Source	Requirement

3. Related Standards

Standards
Source	Requirement

EBA - Published by the European Banking Authority at https://www.eba.europa.eu/