Loading the player...
The solvency ratio is one of many ratios used to measure a company's ability to pay its debts. The formula to determine the solvency ratio is the sum of net aftertax profit and depreciation divided by the sum of shortterm and longterm liabilities.Â
Â
Related Articles

Markets
Analyze Investments Quickly With Ratios
There are four categories of financial ratios: profitability, liquidity, solvency and valuation. 
Investing
Financial Analysis: Solvency Vs. Liquidity Ratios
Solvency and liquidity are equally important for a company's financial health. A number of financial ratios are used to measure a companyâ€™s liquidity and solvency, and an investor should use ... 
Markets
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Investing
What Is the Best Measure of a Company's Financial Health?
Discover the single best financial metric that investors can use for determining the financial health and longterm sustainability of a company. 
Trading
Ratio Analysis
Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ... 
Investing
Analyzing Oracle's Debt Ratios in 2016 (ORCL, SAP)
Learn how the debt ratio, debttoequity ratio and debttocapital ratio are used to evaluate Oracle Corp.'s liabilities, equity and assets. 
Investing
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy. 
Investing
Key Financial Ratios to Analyze Tech Companies
Understand the technology industry and the companies that operate in it. Learn about the key financial ratios used to analyze tech companies. 
Investing
Efficiency Ratio
There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ... 
Markets
4 Leverage Ratios Used In Evaluating Energy Firms
Analysts use specific leverage ratios to compare firms within an industry. A basic understanding of these ratios helps when evaluating oil and gas stocks.