solvency

(noun)

The state of having enough funds or liquid assets to pay all of one's debts; the state of being solvent.

Related Terms

Examples of solvency in the following topics:

  • Introduction to the Balance Sheet

    • The balance sheet is a summary of the financial balances of a company and reflects the company's solvency and financial position.
    • The balance sheet is also referred to as a statement of financial position because it reflects a company's solvency and financial position.

  • Introduction to the Statement of Cash Flows

    • The cash flow statement provides information on a firm's liquidity and solvency.
    • The cash flow statement is intended to provide information on a firm's liquidity and solvency.

  • Importance of Cash Flow Accounting

    • The measurement of cash flow can be used for calculating other parameters that give information on a company's value, liquidity or solvency, and situation.

  • Relationships Between Statements

    • The balance sheet reflects a company's solvency and financial position and the statement of cash flows shows the cash inflows and outflows for a company over a period of time.

  • Key Considerations for the Statement of Cash Flows

    • It provides information about a company's borrowing and debt repayment activities, the company's sale and repurchase of its ownership securities, and other factors affecting the company's liquidity and solvency.