What is financial liquidity?


What is financial liquidity?

Financial Liquidity:

When evaluating a company's financial health, there is a lot on their balance sheets that may make it seem like they have money to pay their bills, but its possible they might be in more trouble then they let on. Having assets of value on hand that exceed their debts or liabilities is important, but if a business cannot make those assets into cash in a reasonable amount of time, they won't help keep the doors open.

Answer and Explanation:

Financial liquidity evaluates how quickly an asset can be liquidated and turned into cash which is the most liquid asset as it can be used immediately...

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Learn more about this topic:

Money Management: Liquidity & Credit

from Corporate Finance: Help & Review

Chapter 3 / Lesson 41

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