Financial Terms Glossary



A general term applied to business entities that have insufficient cash/funds to meet its debt obligations as they fall due. Therefore likely to be in some type of financial trouble.


Every day there are billions of transactions taking place worldwide. Most of these will be paid for. Some companies in these transactions cannot pay for the commitments they are making. They are 'insolvent' - and should stop trading to prevent even more creditors getting burned.

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