Every business has certain set expenses and payment obligations when it comes to day-to-day operations. Whether paying the rent for the production site or offices, procuring raw materials, or paying salaries, operational liquidity is key to covering these expenses. However, the uses of working liquidity extend beyond these. Keep reading to understand the uses
While several performance metrics are used to gauge a company’s financial health, working capital ratio remains among the key ones most analysts use. Assessing a company’s working liquidity ratio gives you insights into its short-term financial health and liquidity position. Since this ratio considers current assets and liabilities, it gives investors and creditors insights
Key factors that Determine Your Business’ Working Capital Requirement
What is working capital? – It is the cash or cash equivalent in the business which can help fulfil the short term capital requirement for operational activities or to ensure business as usual. What is Working capital and why is it important? As highlighted earlier, it is the cash or cash equivalent that helps
Dishonoured Cheque – What does it mean Cheque is an instrument which indicates the right to get paid for the value of the cheque. Unlike other terminologies, dishonoured meaning in banking is pretty straight forward. It means that the obligation of payment could not be met, and the bank will not release the payment
Borrowers often find themselves struggling to meet repayment obligations when faced with a sudden financial crisis like job loss or illness. In such cases, loan restructuring acts as an effective tool to rehash the terms of your loan agreement. Renegotiating loan terms makes payments more manageable, while avoiding the need to default on the
Borrowers often hear terms like ‘charge-off’ in the context of credit cards and loans. A credit card charge-off means that the creditor has given up on collecting the outstanding debt due to the prolonged period of non-payment. A charge-off does not signify a paid-off debt obligation. Rather, it simply means that the lender has
