A result above 100% means the entered liquid-asset amount exceeds the entered net-outflow amount. A value below 100% means the opposite. That plain reading does not by itself establish regulatory compliance, because transitional rules, reporting dates, currencies and supervisory requirements may apply.
The quality of the result depends almost entirely on classification and scenario work performed beforehand. An asset that is readily saleable in ordinary conditions may still fail the applicable HQLA criteria, and contractual cash flows may receive prescribed runoff or inflow treatment.
Keep the calculation with its reporting date, currency, scale and source schedules. Liquidity positions can change quickly, so a ratio without a date is difficult to interpret or reproduce.
Scale check: 120 million divided by 100 million is the same 1.2 as 120 divided by 100 because the “million” factor cancels. It does not cancel if the numerator is 120 million and the denominator is entered as 100 dollars. Write the scale in the working paper even though the form stores only the numbers and currency labels.
Scenario assumptions also matter. The ratio describes a stressed 30-day horizon, not an ordinary cash balance divided by one month’s expenses. If the underlying schedule is revised, the ratio should be recalculated from the revised HQLA and net-outflow totals rather than adjusted informally. An audit trail should identify who prepared those figures and which rule set and date were used.
