22-12-16

(Roman’s theory for insolvency)

Definition;-
“If a person uses his resources “r” with balanced
manners “m”, he will not become insolvent.”
Mathematicaly;-
1
𝑚𝑟 ∝ × 100
∅
𝑘
𝑚𝑟 = × 100
∅

Here,
m= manners
r= resources
Ø= rate of insolvency
k is proportionality constant and it is equal to 1
Some eØamples that will prove above theory are given below…

m= 10,r= 20,Ø=?
𝑘
𝑚𝑟 = × 100
∅
10*20=1/Ø*100
200/100=1/ Ø
Ø=100/200
Ø=0.5
Now, m=5,r=20, Ø=?
𝑘
𝑚𝑟 =
∅

5*20=1/Ø*100
100=1/Ø*100
Ø=100/100
Ø=1
With the decrease of r rate of insolvency increased.
m=20,r=20, Ø=?
𝑘
𝑚𝑟 =
∅

20*20=1/ Ø *100
400=1/ Ø*100
Ø=100/400
Ø=2.5
With the increase of r rate of insolvency decreased……