Solidity

The equity ratio is about a company's ability to pay in the long run. The word itself comes from the word "solid", that is fixed, which gives an indication of what this is about. High solidity means that there is wealth in the company. It can be real estate, securities and other assets held in the plant for longer. This property is normally not something you use to pay the regular operation. High equity ratio is very important when you are going to convince financiers to lend money. It reduces their risk if your company goes bankrupt. Unfortunately, the offers start-up companies rarely show any equity to speak of. This means that you must convince the financiers in other ways.