SOLVENCY

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. 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 formula. In this formula solvency is calculated by adding cash and cash equivalents to short-term investments, then subtracting notes payable.

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solvency

Noun

  1. The state of having enough funds or liquid assets to pay all of one's debts; the state of being solvent.


The above text is a snippet from Wiktionary: solvency
and as such is available under the Creative Commons Attribution/Share-Alike License.

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