The Texas ratio is a financial metric used to assess the credit risk and financial health of banks and financial institutions by comparing the amount of non-performing loans (NPLs) or troubled assets to the institution's tangible common equity capital and reserves. The Texas ratio is calculated by dividing the bank's non-performing assets by its tangible common equity and loan loss reserves, expressed as a percentage. A higher Texas ratio indicates a higher level of credit risk and potential insolvency, suggesting that the bank may be vulnerable to loan defaults, losses, or capital depletion due to a deteriorating loan portfolio or adverse economic conditions. Conversely, a lower Texas ratio suggests a healthier balance sheet, stronger capital position, and lower credit risk exposure, indicating the bank's ability to absorb losses and maintain solvency. The Texas ratio is named after the savings and loan crisis in Texas during the 1980s, where banks with high Texas ratios experienced significant financial distress and regulatory intervention. The Texas ratio is a useful early warning indicator for investors, regulators, and analysts to monitor banks' asset quality, creditworthiness, and financial stability, helping identify potential banking crises, systemic risks, or opportunities for distressed asset acquisition or resolution. However, the Texas ratio should be interpreted in conjunction with other financial metrics, risk factors, and qualitative assessments to provide a comprehensive evaluation of a bank's financial condition

The theory of price, also known as price theory or microeconomic theory, is a branch of economics that analyzes the determination of prices, allocation of resources, and market equilibrium in competitive markets based on the interaction of supply and demand forces. Price theory examines how consumers and producers make rational decisions to maximize utility, profits, or welfare, subject to budget constraints, preferences, and market conditions. The theory of price emphasizes the role of prices as signals, incentives, and allocative mechanisms that convey information about scarcity, value, and opportunity costs, guiding resource allocation, production decisions, and consumption choices in efficient, competitive markets. Price theory models various market structures, including perfect competition, monopolistic competition, oligopoly, and monopoly, and explores their implications for market outcomes, efficiency, and social welfare. Key concepts in price theory include price elasticity of demand and supply, marginal analysis, consumer surplus, producer surplus, market efficiency, and the invisible hand mechanism proposed by Adam Smith, which suggests that competitive markets allocate resources efficiently without central coordination or intervention, leading to optimal outcomes and Pareto efficiency.

Time horizon refers to the length of time over which an investment is expected to be held before it is liquidated or sold, reflecting an investor's investment horizon, financial goals, and risk tolerance. Time horizon is a critical factor in investment decision-making, asset allocation, and portfolio construction, influencing the selection of investment vehicles, risk management strategies, and expected returns. Investors with longer time horizons typically have greater flexibility to tolerate short-term market fluctuations, pursue higher-risk investments, and benefit from the power of compounding and long-term growth potential. Conversely, investors with shorter time horizons may prefer more conservative investments with lower volatility and higher liquidity to meet short-term financial needs or obligations. Time horizon considerations are essential for retirement planning, education savings, wealth accumulation, and achieving long-term financial objectives, guiding investors in aligning their investment strategies with their unique financial circumstances, goals, and time horizons.