The Economy: 14. Bankruptcy and Insolvency
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Cash Flow Insolvency
There are two types of insolvency for business: balance sheet and cash flow. Balance sheet is what assets do they have that they can use to make more revenues in future or sell if they have to. Cash flow is how much cash is coming into the bank account and going out of the bank account. If you're selling your imaginary jam, maybe that will sell better or you'll have more stocks to sell after the autumn when you've made all the jam. And so cash flow matters for a business. But in terms of their long-term viability, you'd look at their balance sheet as well. It's not automatically bad for a business to get into debt. Many businesses have
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