Examples of solvency in a Sentence
They reviewed financial records to measure the borrower's solvency.
Recent Examples of solvency from the Web
Sacramento Regional Transit general manager Henry Li, who took over the agency helm a year ago and managed it back to solvency, was rewarded for his work Monday night with a significant salary boost.
Recruiting more students is a key to financial solvency at Thunderbird Prep, a Cornelius charter school that has been under state scrutiny.
Proponents said the change would put the program on a path to fiscal solvency, but critics worried that countless people could get kicked off the rolls as states faced budget shortfalls.
Even eliminating all fraud would not significantly improve the solvency of the program, as there is not enough abuse in the system to significantly impact its costs.
Measuring short-term and long-term solvency, which includes issues such as state revenue, budget reserves, bond debt and pension liabilities, the Mercatus Center named Florida as the top state in its annual survey of the fiscal health of the states.
Association health plans have been around for decades, but some had solvency problems and went bankrupt, leaving consumers on the hook with unpaid medical bills.
During the financial crisis, capital at some banks plummeted as the firms booked steep losses, sparking uncertainty about the solvency of large bank holding companies.
Even though the district faces critical questions over its solvency, the board never truly uncorked that topic.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'solvency.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of solvency
Financial Definition of SOLVENCY
How It Works
Solvency measures a company's ability to meet its financial obligations.
Short-term solvency is often measured by the current ratio, which is calculated by dividing current assets by current liabilities.
Longer-term solvency is evaluated using the solvency ratio, which divides the company’s net worth by its total assets.
A business can be insolvent but still profitable. For example, a company may borrow money to expand its operations and be unable to immediately repay its debt from existing assets. In this instance, the lender assumes cash flows will increase because of the business expansion and enable the company to comfortably meet payment obligations in the future.
Why It Matters
A company's solvency determines its ability to service debts and achieve long-term growth and profitability. A business that is completely insolvent is unable to pay its debts and will be forced into bankruptcy. Investors should examine all the financial statements of a company to make certain the business is solvent as well as profitable.
SOLVENCY Defined for English Language Learners
Definition of solvency for English Language Learners
: the state of being able to pay debts
legal Definition of solvency
Seen and Heard
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