I. Short-term solvency
The indicators for judging the short-term solvency of enterprises are:
1. current ratio = current assets ÷ current liabilities.
Current assets refer to the assets that an enterprise can realize or use within a business cycle of one year or more, mainly including monetary funds, short-term investments, notes receivable, accounts receivable and inventories.
Current liabilities, also known as short-term liabilities, refer to debts that will be repaid within a business cycle of one year or more, including short-term loans, notes payable, accounts payable, advance receipts, dividend payable, taxes payable, other temporary payments payable, accrued expenses and long-term loans due within one year.
2. Quick ratio = quick assets ÷ current liabilities.
Quick assets refer to the part of current assets that can be realized immediately, such as cash, marketable securities and accounts receivable.
3. Cash ratio = cash assets ÷ current liabilities.
(Cash assets include monetary funds owned by enterprises and securities held).
After a lot of enterprise research, the general standards given by the market are current ratio of 2, quick ratio of 1 and cash ratio of 0.3. At this time, it will not waste the assets of the enterprise, but also ensure the reliable solvency of the enterprise.
Second, long-term solvency.
The indicators for judging the long-term solvency of enterprises are:
1. Asset-liability ratio = (total liabilities/total assets) × 100%.
2. Shareholders' equity ratio = shareholders' equity/total assets × 100%.
3. Equity multiplier = average total assets ÷ owner's equity.
4. Interest guarantee multiple = earnings before interest and tax/interest expense.
(EBIT = total profit+interest expense).
5. Property right ratio = total liabilities/shareholders' equity.
(This indicator reflects the relative proportional relationship between debt capital and equity capital).
6. Debt service coverage ratio = total liabilities/net cash flow from operating activities.