Solvency

Solvency, in finance or business, is the degree to which the current assets of an individual or entity exceed the current liabilities of that individual or entity.^[1] Solvency can also be described as the ability of a corporation to meet its long-term fixed expenses and to accomplish long-term expansion and growth.^[2] This is best measured using the net liquid balance (NLB) formula. In this formula solvency is calculated by adding cash and cash equivalents to short-term investments, then subtracting notes payable.^[3]

See also

• Accounting liquidity
• Debt ratio
• Going concern
• Insolvency
• Quick ratio

Notes

References

• Gaist, Paul A (2009). Igniting the Power of Community: The Role of CBOs and NGOs in Global Public Health. Springer. ISBN 0-387-98156-X. OCLC 310400989. 
• Zietlow, John T; Seidner, Alan G (2007). Cash & investment management for nonprofit organizations. John Wiley and Sons. ISBN 0-471-74165-5. OCLC 255472451. 

External links

• The dictionary definition of solvency at Wiktionary