Difference between economic situation and financial situation
In recent times, especially referring to the economic and financial crisis that has become apparent, we have heard and read in the news on many occasions the concepts of economic and financial situation. However, at first these concepts may seem confusing and very similar, but that is not the case. In this article of .com we will explain the difference between economic situation and financial situation.
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Definition of economic situation and financial situation
The concept of economic situation refers to the patrimony of the person, company or society as a whole, that is, to the amount of assets and assets that they own and that belong to them.
Meanwhile, the financial situation refers to the ability of those persons, companies or society to be able to cope with the debts they have or, which is the same, of the liquidity they have available to pay their debts.
Therefore, someone can have a good financial situation and bad financial, if you do not have enough cash to pay your debts. As well as good financial if you have cash, but financially bad if these debts exceed the total of your assets.
Difference between economic situation and financial situation
The main differences between economic situation and financial situation that we can highlight are:
- The economic situation is measured by total assets.
- The financial situation is measured by the ability to cope with your debts.
- Although both are closely related, they do not have to go in the same direction.
- To have a good economic situation, it is important that our assets are not compromised by debts.
- To have a good financial situation, it is necessary not to have debts or have enough cash to pay them without problems.
