It stands for net liquid balance; a measure of solvency which subtracts current financial liabilities (short-term obligations) from current financial assets (cash assets and short-term investments). It is calculated using the following formula:

NLB = (cash & cash equivalents + short-term investments) – notes payable

For example, a company has cash and cash equivalents (marketable securities) of $60,000, short-term investments of $80,000 and current maturing debts (short-term bank loans) of $40,000. The company’s net liquid balance would be:

NLB = (60,000 + 80,000) – 40,000 = $100,000

The net liquid balance is a component of net working capital (NWC).