'Solvency Status' definition

Company Watch use the technical definition of solvency to determine this – a company is solvent if its assets exceed its liabilities (i.e. it has positive net worth).

The status will be either show on the platform as a green tick (company is solvent) or a red cross (company is insolvent).

Please also note the following:

• There are situations where a company has negative net worth but is not necessarily high risk in the short-term – for example where the liabilities exceed assets but are structured mainly long term so there is no immediate pressure on a company. Conversely, if a company is solvent, there may be significant other factors (trading losses, high levels of bank debt) that make the company weak overall.

• If the company has entered into any formal insolvency procedure, the Solvency Status will be set to ‘insolvent’ (red cross). This includes Administration, Company Voluntary Arrangement (CVA), Receivership, Liquidation (excluding solvent members’ voluntary liquidation).