insolvency

Vocabulary Word

Definition

'Insolvency' is a more fancy way of saying you're out of money. It's when an individual or a company cannot pay its debts when they're due. Like a business checks its pockets and finds them empty!

Examples in Different Contexts

In nonprofit organizations, managing 'insolvency' risks is vital to maintain operations and achieve missions. A nonprofit director might assert, 'Sound financial practices and diversified funding sources are key to insulating our organization from insolvency and ensuring sustained impact.'

Practice Scenarios

Academics

Scenario:

Let’s analyze some case studies to understand the root causes and outcomes of significant financial downturns in businesses.

Response:

Indeed, by studying the insolvency cases of major corporations, we can learn effective strategies for financial management.

Tech

Scenario:

Our operating costs have spiked significantly after the new upgrade. We might need to consider some expense reduction measures.

Response:

Considering our financial crunch, we may have to abort a few projects to avoid insolvency.