Long-term solvency ratio based on debt coverage

Method of calculation

Formula for long term solvency ratio based on debt coverage: debt (group B) / current assets

Ratio's description

This ratio allows to assess the level of current assets financing with the use of company's foreign capital (debt) and it complements the conclusions drawn from the analysis of long-term solvency ratio based on equity coverage (it does not require additional interpretation, but is necessary to calculate the Synthetic ratio of financial stability).