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What is Insolvency?

If a company or individual is in a situation where they can no longer pay their bills it is referred to as insolvency. This is a precarious situation for any business to be in and if cash cannot be generated quickly to cover debts it can lead to bankruptcy. The main reason why this situation occurs is because debts and liabilities are more than cash flow or available liquid assets. It could be that the company has a lot more assets then debts but if this can’t be turned into cash quickly it could still spend the end for the business. Read the rest of this entry »

What is Working Capital?

A business requires different types of capital in order to operate. Working capital is often considered to be the most significant types of capital; it is claimed that the amount of this can determine the success of the company. Working capital is a type of liquid asset that can be used to build a company. The amount of working capital available to a company can be an amount that is positive or minus; in other words a company can have less than zero working capital. If a company has more debts than current assets then this will mean that they have a working capital that is a minus number.

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What is Bankruptcy and How Do You Declare Yourself Bankrupt?

These days, with the economy going through a rough patch, you will frequently hear about businesses going bankrupt. The reality is that even in good times there are always plenty of companies going into bankruptcy. You may have wondered though about what it exactly means to go bankrupt and how do you declare bankruptcy?

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