Define: Solvency

Business, Legal & Accounting Glossary

Definition: Solvency


Quick Summary of Solvency


A company’s ability to pay its creditors when funds are due. The opposite of solvency is insolvency.



What is the dictionary definition of Solvency?

Dictionary Definition


  • The possession of assets in excess of liabilities; ability to pay one’s debts.
  • The state of having enough funds or liquid assets to pay all of one’s debts; the state of being solvent.

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Examples of Solvency in a sentence


Many countries are facing solvency problems in their social services programs as longevity increases and birthrates fall.
If a business does not have enough liquidity, they may also have an issue with solvency.



Cite Term


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https://payrollheaven.com/define/solvency/
Modern Language Association (MLA):
Solvency. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 07, 2020 https://payrollheaven.com/define/solvency/.
Chicago Manual of Style (CMS):
Solvency. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/solvency/ (accessed: April 07, 2020).
American Psychological Association (APA):
Solvency. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/solvency/

Definition Sources


Definitions for Solvency are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 15th February, 2020