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Solvency Ratio in Personal Finance

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The solvency ratio is not only to measure the company's ability to pay long-term debts but we can also apply it to personal finances. with the aim of measuring long-term financial health, avoiding financial difficulties in the future. The formula for calculating the solvency ratio is total assets divided by long-term debts, be it mortgage debts, vehicle installments and other long-term debts.
 
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