Which of these terms indicates that a business has excess liabilities over its assets?

The term indicating that a business has excess liabilities over its assets is insolvency. When a business is considered insolvent, it essentially means that it cannot meet its financial obligations as they come due. In this context, the liabilities exceed the total assets, signaling a critical financial situation where the company may not be able to pay off its debts.

Insolvency can lead to significant consequences, such as bankruptcy proceedings, restructuring, or liquidation of the company’s assets. It’s a vital concept in business finance, as it indicates the financial health and viability of an organization.

The other terms do not convey the same meaning. Cumulative cash flow refers to the net amount of cash being transferred into and out of a business over time, assessing liquidity rather than solvency. Outflow pertains to any cash going out of the business, which does not specifically indicate a balance of assets versus liabilities. Net cash flow represents the difference between cash inflows and outflows during a specific period, focusing on cash management rather than the overall financial obligation state reflected by insolvency.