Which of the following ratios is considered as the solvency ratio?

Solvency ratios measure the long-term financial stability of a business and its ability to meet long-term obligations. They examine the relationship between borrowed funds (debt) and owner's funds (equity).

Debt-Equity Ratio is calculated as:

$\text{Debt-Equity Ratio} = \frac{\text{Long-term Debts}}{\text{Shareholders' Funds}}$

This ratio indicates what proportion of debt and equity the company is using to finance its assets. A higher ratio means higher financial risk as the company relies more on borrowed funds. This clearly assesses long-term solvency.

The other options measure different aspects:

Stock Turnover Ratio and Debtor Turnover Ratio are activity ratios (or turnover ratios). They measure the efficiency of asset utilization, not the ability to pay long-term debts.

Current Ratio is a liquidity ratio. While it does measure the ability to meet obligations, it focuses on short-term liabilities, not long-term solvency. It assesses whether the company can pay its current liabilities using current assets.

Therefore, only Debt-Equity Ratio qualifies as a solvency ratio.