Risk bearing ability is directly related to financial measures including liquidity, solvency, profitability, repayment capacity and financial efficiency. The key financial measures are liquidity and solvency.

Liquidity refers to the ability of a business to meet financial obligations as they come due without hurting normal operations. This is a short term concept that deals with the ability of the business to pay bills in a timely manner.

Solvency measures indicate a firm's ability to repay all financial obligations if all assets are sold. This is a long run concept that measures who has a greater capital interest in the business, you or your creditors.