The solvency ratio is a key financial metric that measures a company's ability to meet its long-term debt obligations. It assesses the financial health of an organization by comparing its total assets to its total liabilities, indicating whether it has enough assets to cover its debts. A higher solvency ratio signifies a lower risk of bankruptcy and a stronger capacity to sustain operations over the long term.
congrats on reading the definition of Solvency Ratio. now let's actually learn it.