Solvency is the financial health of an individual, company, or entity, reflecting its ability to meet long-term financial obligations. It signifies having sufficient assets to cover liabilities, demonstrating stability and the capacity to fulfill financial commitments.
Solvency is crucial for sustained operations, indicating that an entity can manage its debt and remain viable over the long term.
Evaluating solvency involves assessing the relationship between assets and liabilities to ensure ongoing financial viability and the ability to meet obligations as they come due.
