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 tech startups, 'insolvency' is a significant risk due to high initial costs and uncertain revenues. A tech entrepreneur might state, 'Strategic financial planning and adequate funding are crucial to navigate the challenges of insolvency in the volatile tech landscape.'

Practice Scenarios

Business

Scenario:

Given our current financial predicament, it's crucial to reassess our fiscal strategy.

Response:

To stave off insolvency, we might need to increase our revenue streams or cut overhead costs.

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.