Liquidity — How to ensure your business can always pay
Liquidity is a business's ability to meet current financial obligations (salaries, suppliers, taxes) on time with available resources.
Definition
Liquidity is a business's ability to meet current financial obligations (salaries, suppliers, taxes) on time with available resources.
Details
Indicators: current ratio (current assets / current liabilities — target >1.5), quick ratio (without inventory — target >1.0). Risks: seasonal business, long collection periods, heavy dependence on one client. Improvement: shorten collection terms, track cash flow, use factoring.
Example
Current assets: cash 200K + receivables 300K = 500K MKD. Current liabilities: suppliers 250K + salaries 150K = 400K. Ratio = 500/400 = 1.25 — acceptable but not excellent.