which is ratio enables to determine the solvency of an organization
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Answer:
In general, a solvency ratio measures the size of a company's profitability and compares it to its obligations. By interpreting a solvency ratio, an analyst or investor can gain insight into how likely a company will be to continue meeting its debt obligations. A stronger or higher ratio indicates financial strength.
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Answer:
liabilities of ratio
Explanation:
In order to be solvent and cover liabilities, a business should have a current ratio of 2 to 1, meaning that it has twice as many current assets as current liabilities. This ratio recognizes the fact that selling assets to obtain cash may result in losses, so more assets are needed.
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