interpretation of equity ratioas equity ratio


Interpretation of equity ratio

As equity ratio show the relationship of owner funds to total assets higher the ratio or the share of the shareholders in the total capital of the company better is the long term solvency position of the company. This ratio indicates the extent to which the assets of the company can be lost without affecting the interest of creditors of the company.

 

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Managerial Accounting: interpretation of equity ratioas equity ratio
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