2. Roman’sTheory for Insolvency is just a
mathematical derivation of HADITH of Holy
Prophet (P.B.U.H),Who is the real Pioneer of
Economics.
This theory will describe the phenomenon of
insolvency of a person; how a person will
become insolvent and how he can be avoided
from insolvency mathematicaly.
3. Definition:-
“ If a person uses his resources with balanced manners, he will
not become insolvent.”
Mathematically:-
𝑚𝑟 ∝
1
𝑠
× 100
𝑚𝑟 =
𝑘
𝑠
× 100
s =
𝑘
𝑚𝑟
× 100
Here; k is proportionality constant, and its value is 1, Now we get:
s =
1
𝑚𝑟
× 100
Here;
r represents resources of person,
m represents manners,
and s represents rate of insolvency.
4. Following are some examples that will prove this theory;
m= 20
r= 10
s= ?
s =
1
𝑚𝑟
× 100
s =
1
(20)(10)
× 100
s =
1
200
× 100
s =
100
200
s = 0.5
Here rate of insolvency is 0.5
5. Following are some examples that will prove this theory;
If r increases;
m= 40
r= 10
s= ?
s =
1
𝑚𝑟
× 100
s =
1
(40)(10)
× 100
s =
1
400
× 100
s =
100
400
s = 0.25
Here rate of insolvency decrease to 0.25.
6. Following are some examples that will prove this theory;
If r decreases;
m= 10
r= 10
s= ?
s =
1
𝑚𝑟
× 100
s =
1
(10)(10)
× 100
s =
1
100
× 100
s =
100
100
s = 1.00
Here rate of insolvency increases to 1.00.
7. It is clear from previous examples that
rate of insolvency decreases with the
increase of m, rate of insolvency
decreases.