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Solvency. A company is considered solvent if it's current assets exceed it's current liabilities. A company is considered to be insolvent if their current liabilities exceed their current assets.

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The relationship between current assets and current liabilities is important in evaluating a company's?

Liquidity


What is current liabilities to total assets ratio?

Current liabilities to total assets ratio is the comparison between total assets in business with current liabilities in business.


Are current assets always greater than current liabilities?

No, current assets are not always greater than current liabilities. The relationship between the two depends on a company's financial situation. If current liabilities exceed current assets, it may indicate liquidity problems, potentially leading to financial distress. Conversely, having more current assets than liabilities is generally a sign of good short-term financial health.


What are Dependencies between current assets and current liabilities either through balance creations or balance changes?

dependencies between current assets and current liabilities either through balance creations or balance changes.


The ratio of current assets to current liabilities is called the?

The ratio between current assets to current liability is called "Current Ratio".


What is the shareholders equity if it has current assets of 2230 net fixed assets of 9900 current liabilities of 1380 and long-term debt of 4040?

Basic Accounting Equation: Assets = Liabilities + Owner's Equity Assets = Current Assets + Fixed Assets Liabilities = Current Liabilities + Long-term liabilities So Assets = Liabilities + Owner's Equity then current assets + fixed assets = current liabilities + long-term liabilities + owner's equity 2230 + 9900 = 1380 + 4040 + owner's equity 2230+9900 - 1380 - 4040 = owner's equity 6710 = owner's equity


What are dependencies between current assets and current liabilities?

Current assets is when you own something and it can be paid back in less than a year. Current liabilities is what you owe to someone that has to paid back in less than a year.


Sam reported total assets of 1903000 and non current assets of 894410 He also reported a current ration of 1.60 What amount of current liabilities did he report?

Current assets = total assets - long term assets Current assets = 1903000 - 894410 Current assets = 1008590 Current ratio = 1.6 Current ratio formula = Current asset / Current liabilities 1.6 = 1008590 / Current liabilities Current liabilities = 1008590 / 1.6 Current liability = 630369


What is the relationship between Assets and Liabilities and Owner's Equity?

to eat and eat more


What are net current assets?

Formula for net current assets :net current assets = current assets - current liabilities


What is a measure of liquidity?

the two ratios that measure liquidity is acid test and current ratio. the acid test ratio is current assets- stock/ current liabilities the current ratio is current assets/ current liabilities


How do you calculate overdraft?

it is the difference between current assets and current liabilities which is the working capital gap