In this section, you will learn how to use solvency ratios to evaluate a company’s ability to meet its long-term debt obligations. You will learn how to calculate and interpret solvency ratios, such as the time interest earned ratio, the debt ratio, the long-term debt ratio, the debt-to-equity ratio, the book value per share, and the Altman Z-score model, which indicate how well a company can manage its debt and interest payments, and how financially stable it is. You will also learn how to compare solvency ratios across different companies and industries, and how to identify the signs of solvency problems and bankruptcy risk in a company. By the end of this section, you will have the skills and knowledge to assess a company’s long-term financial health using solvency ratios.