Financial Sustainability Ratio

Financial Sustainability Ratio is the ratio to measure the sustainability of a bank in terms of bank performance. One also as an additional target their own capital. Financial Sustainability Ratio (FSR) can be used to plan what to do at that moment in the days to come. (Amalia Rizky, 2004).

Financial Sustainability Ratio (FSR) is a measure for assessing the efficiency of an institution (Soeksmono 1995: 103 in Amalia Rizky, 2004) this ratio is used to determine the growth rate of each period so as to note the financial performance of the bank to conduct its operations or not.
In order to obtain higher profits, banks should try to do business or activities that support the bank's growth rate. Destination banks to generate huge profits is to achieve the returns themselves (Soeksmono, 1995:103 in Amalia Rizky, 2004). This is because of the losses from loans are not paid. This means that a bank will operate more effectively and efficiently if the bank was able to maintain good performance and try to reduce the risks that exist (Soeksmono, 1995:110 in Amalia Rizky, 2004).

Financial Sustainability (www.wbln0018.worldbank) is an organization's ability to compare all the costs (financial costs, such as interest charges on loans, and operating costs, eg salaries, equipment, inventories) for cash or income earned from activities carried out ( such as interest income and income from bank deposits).
Financial Sustainability consists of two components, namely expenses (expense), and income (revenue). Financial sustainability is said well if its value is greater than 100%, meaning that the total income must be greater than the total cost.

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