Which ratio measures solvency by relating cash flows from operating activities to total liabilities?

Question

Quizplus · Accepted Answer

The ratio that measures solvency by relating cash flows from operating activities to total liabilities is the cash flow adequacy ratio. This ratio shows the ability of a company to meet its obligations by comparing the cash generated from operations to its total liabilities. The gearing ratio measures the proportion of a company's debt to its equity. The operations index and turnover of cash flow ratio are not commonly used solvency ratios.

Which Ratio Measures Solvency by Relating Cash Flows from Operating