The   short-term solvency position of company indicates the ability of  the company to meet its short-term abilities like payment to creditors, payment of wages & salaries etc.

Advertisement

 

Short term solvency position is studied by taking into consideration current ratio accompanied by liquid ratio.

 

Long-term solvency position of a company indicates the ability to meet its long-term liabilities like redemption of debentures, payment of long term loans etc.

 

Long-term solvency position is indicated by the proprietary ratio & debt equity ratio.

 

As a shareholder/debenture holder one will be concerned about the long-term solvency position of the company this is because the shareholders/debenture holders invest their money in long-term funds.

Advertisement
The following two tabs change content below.
We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]
0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*

*

BMS.co.in is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2019 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp
or

Log in with your credentials

or    

Forgot your details?

or

Create Account