Solvency
(noun)
- The ability of a company or individual to pay their debts as they come due.
- The ability of a government or a country to meet its financial obligations.
Origin:
From french solvabilité, from latin solvěre ("to pay, settle, discharg.e")
Examples:
- The company's solvency was in question as it struggled to pay its bills.
- The solvency of the government was in doubt as it struggled to pay its debt.
- The company's solvency was improved by the new contracts it had won.
- The solvency of the bank was questioned after the financial crisis.
- The solvency ratio, which measures a company's ability to pay its debt, was low.