Finance

Frequently Asked Questions

What Is Liquidity and Why Is it Important for Firms? Liquidity refers to how easily or efficiently cash can be obtained in order to pay bills and other short-term obligations. Assets that can be readily sold, like stocks and bonds, are also considered to be liquid (although cash is, of course, the most liquid asset of all). Businesses need enough…

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Finance

Financial Tools for Supplier Risk Assessment

To ensure that our suppliers are financially healthy we need to keep checking up some of the financial areas of the supplier. It’s essential to conduct financial assessments on selected suppliers that make up the largest portion of our spends, usually the top 20%, and/or strategic high-risk suppliers, due to management costs and risk. Liquidity Ratios, Profitability Ratios and Inventory…

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