If a ﬁrm possesses assets whose value exceeds the value of its debts, the ﬁrm is said to be

Question

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If the value of a firm's assets exceeds the value of its debts, then the firm is considered solvent. Insolvent means the opposite, where the value of debts exceeds the value of assets, and illiquid means the firm does not have enough cash or assets that can be quickly converted to cash to cover its short-term obligations. Liquid means a firm has enough cash or assets that can be quickly converted to cash to cover its short-term obligations.

If a ﬁRm Possesses Assets Whose Value Exceeds the Value