Solvency

Solvency is the ability to pay the obligations on time. (14)

Solvency is not the same as liquidity.

Solvency ratio / Cash-flow ratio belongs to the group of indicators of liquidity and financial structure/indebtedness and expresses the entity's ability to meet all its liabilities (both short and long term).

The indicator is the reciprocal to the indicator Debt repayment period.

Calculation formula

Recommended value

the minimum value should be at least 0,2; ideally 0,2-0,3.