Assertion: Ratios which are calculated to determine the long-term solvency of business are known as solvency ratios.
Reasoning: Solvency ratios determine the ability of a business to service its indebtedness.
Answer & explanation
Correct answer: option 1
Solvency Ratios: Ratios which are calculated to determine the long-term solvency of business are known as solvency ratios. Thus, these ratios determine the ability of a business to service its indebtedness.