Business flows better when its liquidity is good!
Assets constitute the very basis of the businesses’ value. The more assets your business owns under its belt, the more its valuation is going to be. Assets, in this business context, can include factories, machineries, intellectual property, accounts receivable, as well as the business’ own positive image and its brand equity.
♻️ But the more important thing to consider about—is how to properly manage the assets in order to improve your business liquidity. In doing so, you will need assets which can be converted to cash within a span of one year, to cover for emergency situations. They are known as ‘current assets’; and the degrees of liquidity also vary, for example:
- Savings/ Deposits
- Short-term investments
- Accounts receivable
- Office supplies and equipments
If your assets cannot be sold or converted to cash within one-year period, then they are not really current, due to their low liquidity. Individuals who look after a business should invest the best effort in managing current assets properly in preparation for the future.
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