Financial Solvency
/ˌfaɪˈnænʃəl sɒlˈvɛnsi/
Definitions
- (n.) The capacity of an individual or entity to meet its long-term financial obligations and debts.
A company must demonstrate financial solvency to obtain credit from banks.
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Commentary
Financial solvency focuses on long-term ability to pay debts, distinct from short-term liquidity; draft definitions to emphasize enduring financial health rather than immediate cash flow.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.