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.