Solvency, in finance or business, is the degree to which the current liabilitiess of an individual or entity exceed the current asset of that individual or entity. 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. 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.
- Zietlow 2007, p. 5
- Gaist 2009, p. 34
- Zietlow 2007, p. 30
- 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.
- The dictionary definition of solvency at Wiktionary