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] There exist cryptographic schemes for both proofs of liabilities and assets, especially in the blockchain space.[4][5][6]

This article is about financial solvency. For the policy debate term, see Solvency (policy debate).

See also

Notes
  1. Zietlow & Seidner 2007, p. 5
  2. Gaist 2009, p. 34
  3. Zietlow & Seidner 2007, p. 30
  4. Ji & Konstantinos 2021
  5. Chalkias et al. 2020
  6. Dagher et al. 2015

References
  • Gaist, Paul A (2009). Igniting the Power of Community: The Role of CBOs and NGOs in Global Public Health. Springer. ISBN 978-0-387-98156-7. OCLC 310400989.
  • Zietlow, John T; Seidner, Alan G (2007). Cash & investment management for nonprofit organizations. John Wiley and Sons. ISBN 978-0-471-74165-7. OCLC 255472451.
  • Ji, Yan; Konstantinos, Chalkias (2021). "Generalized Proof of Liabilities". Computer and Communications Security (CCS). ACM.
  • Chalkias, Konstantinos; Lewi, Kevin; Mohassel, Payman; Nikolaenko, Valeria (2020). "Distributed Auditing Proofs of Liabilities". Zkproof.
  • Dagher, Gaby G.; Bunz, Benedikt; Bonneau, Joseph; Clark, Jeremy; Boneh, Dan (2015). "Provisions: Privacy-preserving Proofs of Solvency for Bitcoin Exchanges". Computer and Communications Security (CCS). ACM.
  • The dictionary definition of solvency at Wiktionary
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