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What Is a Solvency Ratio?

By Kristi WaterworthUpdated Apr 16, 2025 at 11:48 PM

Key Points

  • 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 and industries.
  • High solvency ratios suggest long-term financial health, key for making informed investment decisions.

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