This article is about financial solvency. For the policy debate term, see
Solvency (policy debate).
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] There exist
cryptographic schemes for both
proofs of liabilities and
assets, especially in the
blockchain space.[4][5][6]
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Zietlow, John T; Seidner, Alan G (2007). Cash & investment management for nonprofit organizations. John Wiley and Sons.
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Ji, Yan; Konstantinos, Chalkias (2021). "Generalized Proof of Liabilities". Computer and Communications Security (CCS). ACM.