Work out non performing asset ratio instantly with clear inputs, formula shown and shareable results.
The gross ratio shows how much of the book has stopped performing; the net ratio shows what is left unprovided and therefore still at risk to capital. The gap between the two is the provision coverage.
Impairment ratios
Gross = gross NPA / gross advances; net = (gross NPA - provisions) / (advances - provisions)
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
The net ratio, because it measures the unprovided exposure that would hit capital if the loans were written off.
Typically after 90 days past due on principal or interest, with earlier triggers for identified stress.