Solvency Risk Ratio Calculator

✖Total Assets refer to the aggregate value of all assets owned or controlled by a company, organization, or individual.ⓘ Total Assets [TA]			+10% -10%
✖Total Long Term Debt refers to the aggregate amount of debt that a company owes with a maturity date longer than one year from the balance sheet date.ⓘ Total Long Term Debt [TLTD]			+10% -10%

✖Solvency Risk Ratio measures the proportion of a company's assets that are financed by equity versus debt.ⓘ Solvency Risk Ratio [SRR]

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Formula

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Solvency Risk Ratio

Formula

`"SRR" = "TA"/"TLTD"`

Example

`"1.894737"="720000"/"380000"`

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Solvency Risk Ratio Solution

STEP 0: Pre-Calculation Summary

Formula Used

Solvency Risk Ratio = Total Assets/Total Long Term Debt
SRR = TA/TLTD
This formula uses 3 Variables

Variables Used

Solvency Risk Ratio - Solvency Risk Ratio measures the proportion of a company's assets that are financed by equity versus debt.
Total Assets - Total Assets refer to the aggregate value of all assets owned or controlled by a company, organization, or individual.
Total Long Term Debt - Total Long Term Debt refers to the aggregate amount of debt that a company owes with a maturity date longer than one year from the balance sheet date.

STEP 1: Convert Input(s) to Base Unit

Total Assets: 720000 --> No Conversion Required
Total Long Term Debt: 380000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

SRR = TA/TLTD --> 720000/380000

Evaluating ... ...

SRR = 1.89473684210526

STEP 3: Convert Result to Output's Unit

1.89473684210526 --> No Conversion Required

FINAL ANSWER

1.89473684210526 ≈ 1.894737 <-- Solvency Risk Ratio

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Aashna

IGNOU (IGNOU), India

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< 16 Debt Management Calculators

Levered Free Cash Flow

Go Levered Free Cash Flow = Net Income+Depreciation and Amortization-Change in Net Working Capital-Capital Expenditure-Net Borrowing

Present Value of Outstanding Balance

Go Present Value of Outstanding Balance = Existing Payment*(1-(1+Rate of Interest per Annum)^(-Frequency of Payments)/Rate of Interest per Annum)

Home Equity Line of Credit

Go Maximum Line of Credit = Maximum Loan to Value Ratio*Appraised Fair Value of Equity-Outstanding Mortgage Balance

Breakeven Occupancy

Go Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income

Average Payment Period

Go Average Payment Period = Average Accounts Payable/(Credit Purchases/Number of Days in Period)

Paid-in-Kind Interest

Go Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance

Senior Debt Ratio

Go Senior Debt Ratio = Senior Debt/EBIT and Depreciation and Amortization

Mortgage Refinance Breakeven Point

Go Mortgage Refinance Breakeven Point = Total Loan Costs/Monthly Savings

Debt Service Coverage Ratio

Go Debt Service Coverage Ratio = Net Operating Income/Annual Debt

Mortgage Constant

Go Mortgage Constant = Annual Debt Service/Total Loan Amount

Solvency Risk Ratio

Go Solvency Risk Ratio = Total Assets/Total Long Term Debt

Loan Constant

Go Loan Constant = Annual Debt Service/Total Loan Amount

Debtor Days

Go Debtor Days = (Accounts Receivable/Credit Sales)*365

Annual Debt Service

Go Annual Debt Service = Principal+Interest Amount

Net Debt

Go Net Debt = Gross Debt-Cash and Cash Equivalents

Overhead Rate

Go Overhead Rate = Overhead Costs/Revenue

Solvency Risk Ratio Formula

Solvency Risk Ratio = Total Assets/Total Long Term Debt
SRR = TA/TLTD

What is Solvency Risk Ratio?

The Solvency Risk Ratio provides insight into the financial leverage of a company and its ability to absorb losses or downturns in business without jeopardizing its long-term viability. A higher Solvency Risk Ratio indicates a lower level of financial risk, as it means that a greater portion of the company's assets is financed by equity rather than debt. Conversely, a lower Solvency Risk Ratio suggests higher financial risk, as it means that a larger proportion of the company's assets is financed by debt.

Lenders, investors, and analysts use the Solvency Risk Ratio to evaluate a company's financial health and risk profile. It is often compared over time to track changes in the company's capital structure and to assess the impact of debt management strategies on its long-term solvency. Additionally, it is compared with industry benchmarks and competitors to gauge relative financial strength and risk.

How to Calculate Solvency Risk Ratio?

Solvency Risk Ratio calculator uses Solvency Risk Ratio = Total Assets/Total Long Term Debt to calculate the Solvency Risk Ratio, The Solvency Risk Ratio is a financial metric used to assess the long-term financial stability and ability of a company to meet its long-term debt obligations. Solvency Risk Ratio is denoted by SRR symbol.

How to calculate Solvency Risk Ratio using this online calculator? To use this online calculator for Solvency Risk Ratio, enter Total Assets (TA) & Total Long Term Debt (TLTD) and hit the calculate button. Here is how the Solvency Risk Ratio calculation can be explained with given input values -> 1.894737 = 720000/380000.

FAQ

What is Solvency Risk Ratio?

The Solvency Risk Ratio is a financial metric used to assess the long-term financial stability and ability of a company to meet its long-term debt obligations and is represented as SRR = TA/TLTD or Solvency Risk Ratio = Total Assets/Total Long Term Debt. Total Assets refer to the aggregate value of all assets owned or controlled by a company, organization, or individual & Total Long Term Debt refers to the aggregate amount of debt that a company owes with a maturity date longer than one year from the balance sheet date.

How to calculate Solvency Risk Ratio?

The Solvency Risk Ratio is a financial metric used to assess the long-term financial stability and ability of a company to meet its long-term debt obligations is calculated using Solvency Risk Ratio = Total Assets/Total Long Term Debt. To calculate Solvency Risk Ratio, you need Total Assets (TA) & Total Long Term Debt (TLTD). With our tool, you need to enter the respective value for Total Assets & Total Long Term Debt and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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