A firm may be technically insolvent even though it has a positive net worth.

Name: A firm may be technically insolvent even though it has a positive net worth.
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Question

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Technical insolvency occurs when a company's current liabilities exceed its current assets, despite having a positive net worth. This means that the company may not be able to meet its short-term financial obligations even though it appears to have a healthy financial position on paper.

A Firm May Be Technically Insolvent Even Though It Has