Liquidity

Liquidity is the ability to meet short-term obligations as they fall due.

Liquidity is assessed using measures such as cash reserves, current ratio, quick ratio, and cash conversion cycle.

- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.

- Example: Finance teams use **Liquidity** when planning funding needs and managing cash and risk.

- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.