What is solvency?
submitted by v

J.Ribbles

Solvency refers to a company's ability to meet its long-term financial obligations and sustain operations over time. It indicates whether a firm has enough assets to cover its liabilities and is often assessed through ratios like the debt-to-equity ratio or the solvency ratio.

SKpop

Solvency is basically how able a business is to pay off its debts in the long run. If a company is solvent, it means it has enough assets to cover what it owes, so it won't go bankrupt easily.

Rondillio

Solvency measures a company's capacity to continue funding its operations and repay its debts as they come due, emphasizing the long-term financial stability of the business.

Don Julio

It's about whether a company has enough resources and assets to pay all its debts and keep running in the future. If it's solvent, it can stay in business without worrying about insolvency.

Phreb

It means checking if a company has enough money or stuff of value to pay what it owes and stay afloat in the long run. If they're solvent, they're financially healthy.