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.


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

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Solvency. Payroll & Accounting Heaven Ltd. April 07, 2020
Chicago Manual of Style (CMS):
Solvency. Payroll & Accounting Heaven Ltd. (accessed: April 07, 2020).
American Psychological Association (APA):
Solvency. Retrieved April 07, 2020, from website:

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