Insolvency
Inability to pay debts when due.
Real World
Wilko, the household goods retailer, became insolvent in 2023 — despite having stock and stores, it could not pay suppliers and wages on time, forcing it into administration.
Exam Focus
Distinguish insolvency (can't pay debts) from low profitability — a profitable business can still be insolvent if cash runs out.
How well did you know this?