weak or strong balance sheet correlates to poor or good financial health.
the most common (and simple) ratio that measures financial health is the Debt to Equity Ratio. the way to calculate it is pretty self-expanatory. total liabilities/shareholders equity. the lower this ratio the better.
the current ratio is equally well known. it determines how easily a company can pay off its short term debt. it is calculated by current assets/current liabilities. current assets are assets that can be liquidated within a year, current liabilities are debt that has to be paid within a year. a current ratio of 1 or greater is good, and the higher the better.
the quick ratio is just like the current ratio except its current assets - inventories / current liabilities. this is usually
a better representation of financial health than current ratio because inventories are current assets that can sometimes take longer than a year to sell (i think. correct me if im wrong on this)
there are many other ratios you can crunch on the balance sheet. another one is the financial leverage ratio, but i dont remember how to calculate it off the top of my head.
basically a strong balance sheet has more assets (especially cash), and less liabilities. Microsoft is known to have a "fortress-like balance sheet " (a quote from a Morningstar equity analyst) because it has had 0 long-term or short-term debt over the last 10 years along with over $30bn in cash. and JPMorgan easily has the best balance sheet on the street. just wanted to throw that out there.