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INSOLVENT or INSOLVENCY:
INSOLVENCY usually means that someone does not have enough money to pay their debts as scheduled. This definition of insolvency is measured strictly by cash flow. The company could be highly profitable, but without enough cash to pay its bills (on time!), it would still be considered "insolvent".
Sometimes we look only at a company's balance sheet and say a company is insolvent if their total debts is worth more than the total amount of their assets. (Said another way, the value of a company's liabilities exceeds the its assets.) In the dictionary, this is also called "Accounting Insolvency", although I've never heard it called that!
As you can see, Accounting Insolvency looks only at the firm's balance sheet, deeming a company "insolvent on the books" when its net worth appears negative.
