Solvency ratio in Belgium: how to calculate it, the debt ratio and what a good value is
Tips
The short answer
The solvency ratio is equity divided by total assets, times 100. In Belgian annual accounts that is code 10/15 divided by code 10/49 (total liabilities, which equals total assets, 20/58). It is the National Bank's own definition, ratio 19 in its company statistics, and it works on the full, abbreviated and micro models alike. A company with 720,000 euros of equity on a 2.4 million euro balance sheet has a solvency of 30%. The debt ratio (schuldgraad) is the mirror image: debts (17/49) divided by total liabilities. The National Bank does not define a debt ratio, so check which version you are given. Above roughly 25 to 30% solvency is generally seen as comfortable, but the honest benchmark is the sector's own quartiles, and the trend over three years.
The formula and codes come from the National Bank's ratio definitions, its user guide to the Central Balance Sheet Office statistics and the 2021 standard filing models, all read on 1 October 2026. This is general information, not accounting or financial advice.
The National Bank's definition
The National Bank calls the ratio solvency (solvabiliteit) in its definitions and financial independence (financiële onafhankelijkheidsgraad) in its user guide. It measures the share of equity in all the resources the company works with: the higher it is, the less the company depends on money provided by others.
Solvency = equity (10/15) / total liabilities (10/49) x 100
There is no condition attached: unlike turnover-based ratios, it can be calculated for every filing, including micro companies that leave turnover out. Because a balance sheet balances, dividing by total liabilities gives the same result as dividing by total assets, so this is the same formula as in the company financial health check.
Which codes feed the ratio
Code | Line on the liabilities side | Role |
|---|---|---|
10/15 | Equity: contributions (capital and beyond capital), revaluation surpluses, reserves, profit or loss carried forward (14), capital grants (15) | Numerator of solvency |
16 | Provisions and deferred taxes | Neither equity nor debt |
17 | Debts due after more than one year | Long-term debt |
42/48 | Debts due within one year | Short-term debt |
492/3 | Accrued charges and deferred income | Part of debts |
17/49 | Total debts | Numerator of the debt ratio |
10/49 | Total liabilities | Denominator of both |
So solvency, the share of provisions and the debt ratio always add up to 100%. What equity contains, and why a BV has no capital since 2019, is in equity in Belgian annual accounts.
The debt ratio: two versions in circulation
"Schuldgraad" is used in Belgian practice for two different ratios, and they are easy to mix up:
Debts / total liabilities (17/49 / 10/49). A percentage between 0 and 100 for any company with positive equity: 70% means 70% of the balance sheet is funded by creditors. This is the complement of solvency.
Debts / equity (17/49 / 10/15), also called debt-to-equity or gearing. A multiple: 2.3 means 2.30 euros of debt for every euro of equity. It becomes meaningless when equity is close to zero or negative.
A 70% debt ratio and a 2.3 gearing can describe the same company. When a report, a bank or a tool gives you a debt ratio, find out which formula sits behind it before you compare it with anything.
Financial debt vs trade payables
Two companies with the same debt ratio can carry very different risks, because the filing models split debts by type:
Type | After more than one year | Within one year | What it tells you |
|---|---|---|---|
Financial debt | 170/4 (credit institutions and leasing 172/3, other loans 174/0) | 43 (credit institutions 430/8, other loans 439), plus 42, the part of long-term debt due this year | Interest-bearing, with repayment schedules and often security |
Trade payables | 175 | 44 (suppliers 440/4, bills payable 441) | What the company owes its suppliers |
Advances received on orders | 176 | 46 | Customers paying up front, common in construction and projects |
Taxes, salaries and social security | - | 45 | Running obligations to the state and staff |
Other debts | 178/9 | 47/48 | Everything else |
A debt ratio driven by trade payables mostly reflects how the business runs. One driven by bank debt reflects how it was financed, and it comes with interest and fixed repayment dates. Two more places in the notes are worth a look on the abbreviated and micro models: overdue tax debts (9072) and overdue debts to the National Social Security Office (9076). A non-zero amount there says more than any ratio. The abbreviated model also shows how much long-term debt runs for one to five years (8912) and for more than five years (8913).
How to interpret it per sector
There is no legal or official threshold for solvency. The 25 to 30% rule of thumb is a practitioner habit, and balance sheets differ structurally between activities:
Owning vs renting. A company that owns its buildings and machines, financed with a bank loan, carries both the asset and the debt. A company that rents its premises carries neither, so its solvency looks higher for the same business.
Advances from customers. In construction and project work, advances received count as debts, which lowers solvency without any borrowing.
Group financing. A subsidiary funded with loans from its parent can show low or even negative equity for years and still pay every invoice.
A single investment. Buying premises with a loan pushes solvency down in one year with nothing wrong.
The right comparison is the sector itself. The National Bank's Central Balance Sheet Office statistics publish, per sector grouping, a globalised solvency ratio and the quartiles Q1, Q2 and Q3, which the National Bank describes as reference values for a company that wants to situate itself in its sector. The globalised figure is a weighted average that a few large companies can dominate; the median (Q2) is usually the fairer benchmark for an SME.
A worked example
An illustrative Ghent wholesaler, a BV filing the abbreviated model:
Line | Code | Amount |
|---|---|---|
Equity | 10/15 | €720,000 |
Provisions and deferred taxes | 16 | €30,000 |
Financial debt after more than one year (warehouse loan) | 170/4 | €500,000 |
Long-term debt due within the year | 42 | €100,000 |
Short-term financial debt (credit line) | 43 | €250,000 |
Trade payables | 44 | €600,000 |
Taxes, salaries and social security | 45 | €120,000 |
Other debts | 47/48 | €80,000 |
Total debts | 17/49 | €1,650,000 |
Total liabilities | 10/49 | €2,400,000 |
Solvency: 720,000 / 2,400,000 = 30.0%.
Debt ratio on total liabilities: 1,650,000 / 2,400,000 = 68.75%. With provisions at 1.25%, the three add up to 100%.
Debt to equity: 1,650,000 / 720,000 = 2.3.
Financial debt: 500,000 + 100,000 + 250,000 = 850,000 euros, or 35.4% of the balance sheet. Trade payables are 25.0%.
On its own, 30% sits right at the rule of thumb. Now suppose the two previous filings showed 38% and 34%, while the credit line grew each year. That is a company funding something with the bank, and the next question is what: an investment you can see in the fixed assets, or losses you can see in code 14.
What solvency does not tell you
Whether bills get paid next month. That is liquidity; see liquidity ratios in Belgian accounts.
Whether the company is in legal trouble. When equity turns negative, a BV or NV may have to ring the alarm bell; the alarm bell procedure explains the thresholds.
What happened since the balance sheet date. Accounts are filed up to seven months after year end. A credit check adds payment behaviour and recent publications; see how to run a company credit check.
Reading solvency for a list of companies
Calculating solvency for one company takes two codes. For a prospect list or a supplier base you also want the split of the debt and three years of trend, which means opening one filing after another. Bizzy shows, on each Belgian legal entity's Financials tab, four years of figures from the accounts filed with the National Bank: total assets, equity, debt and debt ratio, long- and short-term debt, financial debt and accounts payable, with the year-on-year change and the filed PDF per year. You can start for free; the plans are on the pricing page.
Frequently asked questions
How do you calculate solvency from Belgian annual accounts? Divide equity (code 10/15) by total liabilities (code 10/49) and multiply by 100. That is the National Bank's definition and works on every filing model.
What is a good solvency ratio? Above roughly 25 to 30% is generally seen as comfortable, but it is a rule of thumb. Compare with the sector's median in the National Bank's statistics and with the company's own previous years.
What is the difference between solvency and the debt ratio? Solvency is the share of equity in the balance sheet; the debt ratio is the share of debts (17/49). Together with provisions (16) they add up to 100%. Some sources use debt divided by equity instead.
Can solvency be negative? Yes, when accumulated losses exceed what the shareholders put in, so equity is negative. It is a warning sign and a trigger for the alarm bell procedure, not a bankruptcy in itself.
Photo: Arenberg Castle in Leuven, Juhanson, CC BY-SA 3.0, via Wikimedia Commons