Question

long term solvency is indicated by​

Answer 1

Long -term solvency is indicated by Debt-equity ratio. The debt-to-equity (D/E) ratio is calculated by dividing a company's total liabilities by its shareholder equity. These numbers are available on the balance sheet of a company's financial statements.

Answer 2

Answer:

Long -term solvency is indicated by Debt-equity ratio

Explanation:

• Debt-equity ratio is an indicator of long-term solvency.
• The debt-to-equity (D/E) ratio is derived by dividing the total liabilities of a corporation by the equity held by shareholders. The balance sheet of a company's financial statements contains these figures.
• We can evaluate a company's capacity to fulfil its long-term financial obligations using the solvency ratio.
• Another method of assessing a company's solvency is to look at its debt-to-equity ratio. A company's capacity to pay off its obligations is gauged by its debt-to-equity ratio.
• This indicator reveals the amount of debt a business has in comparison to the capital its owners have put into it.
• This solvency ratio, which is employed by accounting firms and banks among others, shows how much debt is incurred relative to available equity.

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