By Leanna Kelly If you’ve got more money going out than you do coming in, it’s an unsustainable trend. Eventually, bills come due and if there’s not enough money in the bank, there’s no way to pay them. Soon, you end up accumulating more debt than you’re worth, with no means of balancing it out. It’s called insolvency, and it’s every company’s worst nightmare—because it can lead to bankruptcy.
Insolvency occurs when liabilities outweigh assets, and a company can’t pay off debt. It typically arises when companies borrow money to maintain operations, but don’t generate the necessary revenue to pay back these debts. …read more
