What aspects should be analyzed to judge the solvency of enterprises?
Judging the solvency of an enterprise should be analyzed from the following aspects: current ratio, quick ratio, asset-liability ratio, cash liability ratio, etc. By calculating the current ratio and quick ratio of enterprises, we can understand the ability of enterprises to repay short-term debts; By calculating the asset-liability ratio, we can understand the ability of enterprises to repay long-term debts; It is generally believed that the current ratio of the company is greater than 2, the quick ratio is greater than 1, and the asset-liability ratio is less than 50% (less than 60% in China), indicating that the company has strong solvency; Simply analyzing the company's solvency index can not reflect the company's real solvency, but should be combined with the company's profitability. The solvency of a company also depends on its profitability. Even if all the indexes of the company's solvency meet the above standards, if the company is in recession and belongs to a sunset industry with low profitability (that is, the profit rate before interest and tax is lower than the cost of capital of liabilities), the company may have a certain solvency in the short term from the solvency index analysis; But in the long run, the company's solvency is unreliable and questionable.