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What are the most common solvency ratios used by investor or management to understand the current state of a company’s financial situation?

Solvency refers to a company’s ability to meet its long-term obligations and will be affected by the amount of debt in its capital structure. The ratios that you should use to calculate a company’s solvency include the total debt ratio, debt-to-capital ratio, debt-to-equity ratio, and times interest earned ratio.

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