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To measure a firm's solvency as completely as possible, we need to consider The firm's relative proportion of debt and equity in its capital structure

  1. To measure a firm's solvency as completely as possible, we need to consider

  1. The firm's relative proportion of debt and equity in its capital structure
  2. The firm's capital structure and the liquidity of its current assets
  3. The firm's ability to use Net Working Capital to pay off its current liabilities
  4. The firms leverage and its ability to make interest payments on its long-term debt
  5. The firm leverage and its ability to turn its assets over into sales

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