Solvency is an indication of a business having sufficient value of assets to meet its long-term financial commitments. It is measured by the net worth statement, often called a balance sheet.
A business is solvent if the value of its assets (value of the business) is greater than its liabilities (the amount the business owes to parties outside of the business). If the liabilities are greater than the value of the assets the business is insolvent and subsequently bankrupt.
Understanding Net Worth provides you with the essentials of a net worth statement and what it means. Developing a Net Worth Statement for a Value-Added Business provides directions for completing net worth statements. Analyzing a Net Worth Statement gives you in-sights into the financial health of your business.
On the right you will see calculators and worksheets available on the Business Workbench.