The formula consists of two parts, calculating tangible net worth and tangible net worth debt ratio respectively.

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  Total liabilities, including current and non-current liabilities, for the most recent reporting period reflect the entire debt burden of the business.

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  Tangible net worth refers to the net value of shareholders' equity after deducting intangible assets that are difficult to quickly realize in cash. It can more accurately reflect the net assets that the company actually owns and can be used to repay debts.

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  The equity attributable to the parent company's shareholders reflects the shareholders' ownership rights in the company.

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  The value assessment and realization of intangible assets, such as patents and trademarks, are uncertain.

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  Development expenditure refers to the expenses incurred by an enterprise for the research and development of new products or new technologies, and its future value is uncertain.

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  Goodwill refers to the portion of the purchase price that exceeds the fair value of the net assets of the acquired company when a company acquires other companies. Its value is usually related to the expectations of the merger and acquisition.

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  Long-term deferred expenses refer to expenses that have already been incurred by the company but need to be amortized over multiple accounting periods, and their liquidity is relatively weak.

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  Deferred income tax assets refer to assets that can reduce future income taxes payable due to deductible temporary differences, deductible losses, etc., and their liquidity depends on future profit levels.