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<h1>
Solvency Ratios
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<p>
Solvency ratios measure a company’s ability to sustain operations and pay its liabilities
in the long term by comparing debt levels with equity, assets and earnings. Additionally,
solvency ratios show a company’s ability to make payments and pay off its long term obligations,
better ratios indicate that a company is financially stable.
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<h2> Debt to Equity Ratio </h2> <br>
<p>
This ratio shows the percentage of a company’s financing that comes from creditors and investors.
Furthermore, a higher debt to equity ratio indicates that most of the company’s financing comes
from creditors (loans) than investor financing (shareholders). A lower debt to equity ratio indicates
a company is more financially stable, whereas company’s with a higher debt to equity ratio are considered
risky as their debts need to be paid back to creditors.
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<label for = "Total Liabilites:">Total Liabilites: </label> <br>
<input id = "totalL" />
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<label for = "Total Equity:"> Total Equity : </label> <br>
<input id = "totalE" />
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<button class="buttonCalc" <button onclick="calcdebtRatio()"> Calculate</button>
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<p id="debtRatio"> Debt to Equity Ratio: </p>
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<h2> Equity Ratio </h2> <br>
<p>Measures the amount of assets that are financed by owners' investments and through investors
by comparing the total equity in the company to total assets. Equity ratios emphasizes two imperative
financial concepts; firstly, it shows how much of the total company assets are owned outright by the
investors. Secondly, inversely shows how leveraged the company is with debt. Moreover, higher equity
ratios are typically favourable for companies as high investment levels from shareholders shows potential
shareholders that the company is worth investing in.
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<label for = "Total Equity:"> Total Equity: </label> <br>
<input id = "total_E" />
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<label for = "Total Assets:"> Total Assets: </label> <br>
<input id = "totalA" />
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<button class="buttonCalc" <button onclick="equityRatio()"> Calculate</button>
<br><br>
<p id="equity_Ratio"> Equity Ratio: </p>
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<h2> Debt Ratio </h2> <br>
<p>
Measures a firm’s total liabilities as a percentage of its total assets,
it shows how many assets the company must sell in order to pay off all of its
liabilities. The debt ratio is shown in decimal format since it calculates total
liabilities as a percentage of total assets. Furthermore, a lower ratio is more
favourable than a higher ratio as it indicates that the company is more stable,
with a potential for longevity due to a lower overall debt. A debt ratio of 0.5
is considered less risky than say 1 or higher as it shows the company has twice
as many assets than liabilities.
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<label for = "Total Liabilites:"> Total Liabilites: </label> <br>
<input id = "total_L" />
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<label for = "Total Assets:"> Total Assets: </label> <br>
<input id = "total_A" />
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<button class="buttonCalc" <button onclick="debtRatio()"> Calculate</button>
<br><br>
<p id="debt_Ratio"> Debt Ratio: </p>
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