What is a key indicator of a company's internal solvency level?

Cash from operating activities

Cash from operating activities is a key indicator of a company's internal solvency level. Internal solvency refers to a company's ability to generate sufficient cash from its core business operations to meet its financial obligations, such as paying dividends, repaying loans, and making new investments, without relying on external sources of financing. Cash from operating activities represents the cash generated or used by a company's main revenue-generating activities. It reflects the ability of the company to generate cash from its day-to-day operations, which is critical for maintaining its ongoing business activities and financial health. A positive cash flow from operating activities indicates that the company is generating enough cash internally to support its operations and financial commitments, which is a positive sign of solvency.