Technicals Stability Returns

Understanding Solvency Ratios

Solvency Ratios measure the company's ability to meet its long-term and short-term debt obligations. This metric provides an insight into the company.

The solvency ratios indicate whether the company's cash flow is sufficient or not to pay off its debts. Prospective lenders and bond investors use solvency ratios to evaluate a company's creditworthiness.

Solvency Ratios are also known as 'Leverage Ratios'.

Some of the key ratios are:

1.Debt to Equity Ratio

2.Short Term Debt to Equity Ratio

3.Interest Coverage Ratio

4.Dividend Coverage Ratio

5.Shareholders Equity Ratio

6.Debt to EBITDA Ratio

7.Asset to Shareholders Equity Ratio

8.Debt to Assets Ratio

9.Cash Flow from Operation (CFO) to Debt Ratio

10.Debt to Capital Ratio