Question Details

	Username: Fluffy Rating: Asked to: Talitha Taslim Date Created: 07 Dec 2017
Category	28
Tag	Financial
Question	What is 'Solvency'?

Advice from Guru

Hello Fluffy,

Solvency is the ability of a company to meet its long-term financial obligations. Solvency is essential to staying in business as it asserts a company’s ability to continue operations into the foreseeable future. While a company also needs liquidity to thrive, liquidity should not be confused with solvency. A company that is insolvent must often enter bankruptcy.

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