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> I would define it as "current liabilities in excess of current assets" I don't think this is a good definition. If I have a $150 electric bill due immediate
by ncallaway 6y ago
> I would define it as "current liabilities in excess of current assets"
I don't think this is a good definition.
If I have a $150 electric bill due immediately, no cash, and $200,000 of real estate I have a liquidity issue.
This despite the fact that my current assets far exceed my current liabilities.
- skybrian 6y agoIf someone tells you to buy the Empire State Building and you refuse, do you have a liquidity issue? They are refusing to do things to prevent liquidity issues. Their customers can send requests that cause them to temporarily take on more debt. There are particular orders that need a lot of money to execute. Block those orders and they don't need to borrow the money.