A net assets ratio is a solvency measure used to evaluate a company’s financial health by comparing its assets to its liabilities. It is calculated by dividing a company’s total assets by its total liabilities.
For example, if a company has $100,000 in assets and $50,000 in liabilities, its net assets ratio would be 2. This means that the company has twice as many assets as it does liabilities, which is a good sign of financial health.