Solvency refers to the ability of a

Solvency refers to the ability of an enterprise to repay its due debts. Timely repayment of maturing debt, is a reflection of enterprisesan important indicator of the industry's financial situation is good or bad. Through the analysis of the solvency, you can examine theability and risk of the company's continued operation , which helps to predict the company's future earnings. At present, the most commonly usedmethod for analyzing the solvency of an enterprise is to use the balance sheet and cash flow statement as the basis to calculate a series of ratio indicators and compare them with relevant evaluation standards. These indicators include: current ratio, quick ratio, cash ratio, asset-liability ratio, equity ratio and so on.