Examples of solvency in a Sentence
They reviewed financial records to measure the borrower's solvency.
Recent Examples of solvency from the Web
The district's overall solvency is pat of the review.
If that were true, cuts to taxes other than the payroll taxes that allegedly finance the programs would pose no threat to their solvency.
Divided lawmakers are staring key fiscal and legislative deadlines in the face this September, from government solvency to an expiring program for flood insurance, as well as funds for disaster relief in the wake of hurricane Harvey.
Many such clinics have subsidy programs to keep costs low for their patients, and coverage bans will take an additional toll on their solvency.
The program is completely safe through 2034, and with some relatively small tax changes, it could be brought to permanent solvency.
Texas and Florida can attract instant capital for relief and rebuilding based on the strength of their local economies and the solvency of their citizens.
Maria’s aftermath may also lead to a reassessment of current plans to return the commonwealth to solvency.
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.
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
Seen and Heard
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