What defines a solvency ratio?

The solvency ratio specifically assesses a company's ability to meet its long-term obligations and provides insight into its long-term financial stability. This ratio compares a company's total assets to its total liabilities, helping to determine whether the company has enough assets to cover its debts over the long term. A higher solvency ratio indicates a stronger financial position, suggesting that the company is more capable of maintaining operations and fulfilling its long-term financial commitments.

In terms of the other options, measuring a company's short-term liquidity pertains to liquidity ratios, which focus on the company's ability to meet short-term liabilities rather than long-term obligations. Evaluating financial performance over time typically relates to profitability and operational efficiency rather than solvency. Asset management efficiency, while important, is more about how well a company uses its resources to generate revenue, which does not directly correlate with its ability to settle long-term debts. Thus, the focus on long-term obligations is what makes the correct answer particularly relevant in the context of solvency ratios.