how is a solvency ratio calculated 
solvency ratios measure a company s cash flow which includes non cash expenses and depreciation against all debt obligations for instance consider the debt to assets ratio a popular metric that measures the degree that a company s assets are financed by debt where debt to assets equals total debt divided by total assets another common solvency ratio the debt to equity d e ratio shows how financially leveraged a company is where debt to equity equals total debt divided by total equity 