fixed assets (net) to net worth ratio

  

Definition

Measure of the solvency of a firm, this ratio indicates the extent to which the owners' cash is frozen in the form of brick and mortar and machinery, and the extent to which funds are available for the firm's operations. A ratio higher than 0.75 indicates that the firm is vulnerable to unexpected events and changes in the business climate. Formula: Net fixed assets √∑ net worth.

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