Insolvency
Etymology
From Latin in-, "not," plus solvere, "to pay, loosen." Literally the inability to "release" oneself from one’s obligations. The term long predates modern bankruptcy law, which grew up to manage exactly this state.
noun · /in-SOL-ven-see/
The condition of being unable to pay your debts, because what you owe exceeds what you own or can raise.
What it names
It marks the line where financial trouble becomes structural — not a cash-flow hiccup but the point where the numbers simply cannot be made to work.
Example
Mounting losses pushed the firm into insolvency, and it filed for bankruptcy that spring.
Related idea
A firm can be solvent yet still fail on liquidity — rich in assets but short of cash to pay a bill on time.