Question

5. What can be done by solvency ratio?​

Answer 1

Answer:

A solvency ratio is a key metric used to measure an enterprise's ability to meet its long-term debt obligations and is used often by prospective business lenders. A solvency ratio indicates whether a company's cash flow is sufficient to meet its long-term liabilities and thus is a measure of its financial health...

Answer 2

★Question★

What can be done by solvency ratio?

★Answer★

»A solvency ratio is a key metric used to measure an enterprise's ability to meet its long-term debt obligations and is used often by prospective business lenders. A solvency ratio indicates whether a company's cash flow is sufficient to meet its long-term liabilities and thus is a measure of its financial health.

★Examples of solvency ratios :-

»Current ratio. This is current assets divided by current liabilities, and indicates the ability to pay for current liabilities with the proceeds from the liquidation of current assets.