asked 166k views
19 votes
What is a solvency ratio?

1 Answer

9 votes

Answer:

A solvency ratio measures how well a company's cash flow can cover its long-term debt. Solvency ratios are a key metric for assessing the financial health of a company and can be used to determine the likelihood that a company will default on its debt.

Step-by-step explanation:

answered
User Jithesh Chandra
by
7.5k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.