banking and financial ratioa

if TOL/TNW is 8 what does it say and what are its symptoms pls do reply
Replies (1)

TOL/TNW shows comparison of total outside liabilities (current and term liabilities both)and tangible net worth. It is considered as a better indicator of solvency. There is no ideal ratio or benchmark is set for this ratio.

Higher ratio would indicate excessive dependence on outside funds and may be considered as a negative factor.

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