Solvency ratio: Assesses a company's ability to

Solvency Ratio assesses a company's ability to meet its long-term financial obligations, i.e. repayment of debt principal and interest. Discover the meaning, types, and importance of solvency ratios in financial analysis. Learn how to calculate key ratios like Debt to Equity, Debt Ratio , and Interest Coverage, and understand their role in assessing long-term financial health. Let’s understand the solvency ratio meaning and interpretation in detail, learn how to calculate it, and understand its various types. What is solvency ratio ? A solvency ratio is a financial metric that assesses a company's ability to meet its long-term debt obligations. In this guide, we’ll explain what a solvency ratio is, how to calculate it, and share examples to make it easier to understand. Solvency ratios measure a company’s ability to meet long-term debt obligations and maintain financial stability .