Insolvency
What Insolvency means in Business GCSE, as defined for AQA, OCR, Pearson Edexcel.
Definitions of Insolvency
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Reference: AQA
A situation where a profitable firm can still fail if customers buy on credit and cash arrives later than bills fall due.
When a business cannot meet its short-term obligations because it lacks sufficient cash.
A risk faced when cash flow problems mean the business cannot meet its payments.
When a business is unable to pay its short-term debts as they fall due.
Topics that use Insolvency
- Cash flow (AQA GCSE)
- Cash and cash flow (OCR GCSE)
- Cash and cash-flow (Pearson Edexcel GCSE)
Related terms
- Cash
- Net cash flow
- Opening balance
- Closing balance
- Cash Flow
- Cash Flow Forecast
- Cash flow management
- Cash inflows and outflows
Using Insolvency in the exam
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