solvency

[ˈsɒlvənsi]

solvency Definition

the ability of a person, company, or organization to pay its debts.

Using solvency: Examples

Take a moment to familiarize yourself with how "solvency" can be used in various situations through the following examples!

• Example

  The company's solvency was in question after the economic downturn.

• Example

  The bank requires proof of solvency before approving a loan.

• Example

  The government is taking measures to ensure the solvency of the healthcare system.

solvency Synonyms and Antonyms

Synonyms for solvency

• creditworthiness
• financial stability
• solventness

Antonyms for solvency

• insolvency
• bankruptcy

Phrases with solvency

• maintain solvency

  to keep oneself or one's business financially stable and able to pay debts

  Example

  The small business owner struggled to maintain solvency during the pandemic.

• test of solvency

  a measure of a company's ability to pay its debts, often used in legal proceedings

  Example

  The court ordered a test of solvency to determine if the company could pay its creditors.

• solvency ratio

  a financial metric that measures a company's ability to meet its debt obligations

  Example

  The solvency ratio showed that the company had enough assets to cover its liabilities.

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Summary: solvency in Brief

Solvency [ˈsɒlvənsi] refers to the ability of a person, company, or organization to pay its debts. It is often used in legal proceedings and financial metrics like the solvency ratio. Maintaining solvency is crucial for businesses, especially during economic downturns.