Financial distress
A position where debts, cash flow or financial commitments are becoming difficult to manage and action may be needed before the position worsens.
Related terms
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Cash-flow insolvency
A position where a company cannot pay debts as they fall due, even if it may own assets with significant value.
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Cash flow
Money moving into and out of a business or household. Strong profit on paper does not always mean there is enough cash to pay bills when they fall due.
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Solvency
The ability to meet debts and financial obligations under the relevant financial and legal tests.
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