Solvency Analysis and Comparison

abhishreshthaa

Abhijeet S
Solvency Analysis:


It refers to analysis of long-term financial position of a company. This analysis helps to test the ability of a company to repay its debts. For this purpose, financial structure, interest coverage is analyzed.



Comparisons:


Profitability, liquidity and solvency of a company may be compared either over a number of accounting years, or with other firms or with the standard set at the industry level.
 
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