Solvency ratios assess a company's debt repayment capability by comparing debt to assets and equity. Different solvency ratios, such as debt-to-assets and debt-to-equity, provide insights across time ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Somer G. Anderson is CPA, doctor of ...

Before you jump into any investment, it's important to determine if a company can maintain its liquidity and remain solvent over time. Liquidity and solvency ratios work together, but they shouldn't ...

If you’re a business owner looking for a loan, your lender will be looking for your solvency ratio. Of course, if you have a startup and are new to running a business, you may not know what a solvency ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

All entities have to balance their financial leverage with their working capital and cash reserves; otherwise they run the chance of becoming insolvent. Given the complexity of the U.S. financial ...

Solvency is the financial staying power of a business. Business owners tend to think their No. 1 priority is to make a profit. That end, however, can lead to using some particularly short term-minded ...

Taking on debt can be perfectly reasonable, and desirable, for a business to do if operations are profitable. The profits earned from the additional investment will cover the borrowing costs, and the ...

An indication of how well a company is able to meet its debt obligations. It is calculated by adding a company’s net profits after tax and depreciation and dividing this figure by its long-term and ...