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Solvency

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Title: Solvency  
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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]

Contents

  • See also 1
  • Notes 2
  • References 3
  • External links 4

See also

Notes

  1. ^ Zietlow 2007, p. 5
  2. ^ Gaist 2009, p. 34
  3. ^ Zietlow 2007, p. 30

References

  • Gaist, Paul A (2009). Igniting the Power of Community: The Role of CBOs and NGOs in Global Public Health. Springer.  
  • Zietlow, John T; Seidner, Alan G (2007). Cash & investment management for nonprofit organizations. John Wiley and Sons.  

External links

  • The dictionary definition of solvency at Wiktionary
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