This is a commonly used ratio to assess a lending institution's ability (e.g. a bank) to cover withdrawals made by its customers. It is also known as LTD ratio and often expressed as a percentage. A higher LTD ratio is an indicator that the institution's liquidity is low and may not be able to meet unforeseen fund requirements. However, if the LTD ratio is low the institution may not be profiting as much as they could be.