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.
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.
There exist
cryptographic schemes for both
proofs of liabilities and
assets
In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can ...
, especially in the
blockchain space.
See also
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Accounting liquidity
In accounting, liquidity (or accounting liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio
In mathematics, a ratio shows how many times one number contains an ...
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Debt ratio
Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are provided via debt. It is the ratio of total debt ( short-term and long-term liabilities) and total assets (the sum of current assets, fixed assets, and oth ...
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Going concern
A going concern is a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the spec ...
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Insolvency
In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet ...
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Quick ratio
Notes
References
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External links
*{{Wiktionary-inline
Financial economics