Solvency example sentences

1,00,000 represent a ratio of 1: But it has no relevance to assess efficiency or solvency.Liquidity ratios are calculated to have indications about the short term solvency of the business, i.e. the firm s ability to meet its current obligations.liquidity, solvency, activity and profitability ratios.Solvency of business is determined by its ability to meet its contractual obligations towards stakeholders, particularly towards external stakeholders, and the ratios calculated to measure solvency position are known as Solvency Ratios .It gives a concise summary of firm's resources and obligations and measures the firm's liquidity and solvency.A cash flow statement when used along with other financial statements provides information that enables users to evaluate changes in net assets of an enterprise, its financial structure (including its liquidity and solvency) and its ability to affect the amounts and timings of cash flows in order to adapt to changing circumstances and opportunities.The amount of cash from operations' indicate the internal solvency level of the company, and is regarded as the key indicator of the extent to which the operations of the enterprise have generated sufficient cash flows to maintain the operating capability of the enterprise, paying dividends, making of new investments and repaying of loans without recourse to external source of financing.However, the accounting treatment relating to dissolution of partnership on account of insolvency of partners is not being taken up at this stage.Solvency ratios are calculated to determine the ability of the business to service its debt in the long run instead of in the short run.It is possible to assess the profitability, solvency and efficiency of an enterprise through the technique of ratio analysis.But they place more emphasis on the firm's projected financial statements to make analysis about its future solvency and profitability.This chapter covers the technique of accounting ratios for analysing the information contained in financial statements for assessing the solvency, efficiency and profitability of the firms.In case of a crisis like the above it stands by the commercial banks as a guarantor and extends loans to ensure the solvency of the latter.Suppliers of long-term debt are concerned with the firm's longterm solvency and survival.Ratios which are calculated to determine the long-term solvency of business are known as solvency ratios.