companydata.dkSolvency ratio (soliditetsgrad)
The solvency ratio (soliditetsgrad) shows how large a share of a company's assets is financed with equity. It is calculated as equity divided by the balance sheet total, multiplied by 100.
The solvency ratio is the most widely used measure of a company's financial resilience. The higher the solvency, the larger the losses the company can absorb before creditors are at risk.
How the solvency ratio is calculated
Solvency ratio = equity / balance sheet total × 100. If a company owns assets of DKK 10 million and has equity of DKK 4 million, the solvency ratio is 40%.
What is a good solvency ratio?
It depends on the industry: capital-intensive companies typically run lower than consultancies without large assets. As a rule of thumb, 30-40% is considered solid, while solvency below 10% leaves little buffer. Negative solvency means the equity is lost — a serious warning sign. Always compare against the industry level rather than a fixed number.
Related terms
Equity (egenkapital)
Equity (egenkapital) is the difference between a company's assets and its liabilities — the owners' share of the company. It typically consists of share capital, retained earnings, and any reserves.
Balance sheet total (balancesum)
The balance sheet total (balancesum) is the sum of all the company's assets — and equally the sum of equity and liabilities, since the balance sheet balances by definition. It is used as a measure of company size.
Liquidity ratio (likviditetsgrad)
The liquidity ratio (likviditetsgrad) shows a company's ability to pay its current liabilities with its current assets. It is calculated as current assets divided by current liabilities, multiplied by 100.
Return on assets (afkastningsgrad)
Return on assets (afkastningsgrad) shows how much operating profit a company generates per krone tied up in assets. It is calculated as operating profit divided by the balance sheet total, multiplied by 100.