Accountancy, asked by upasnagupta5000, 8 months ago

Enumerate the ratio that measures a firm overall effectiveness and specify the related formula

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Answered by Anonymous

2

Answer:

solvency ratios

This way, the solvency ratio assesses a company's long-term health by evaluating its repayment ability for its long-term debt and the interest on that debt. As a general rule of thumb, a solvency ratio higher than 20% is considered to be financially sound; however, solvency ratios vary from industry to industry.

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