What measures will improve the company's liquidity

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2020-07-03 01:31:07

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The Liquidity of your company is the degree of possibility of early or simply accelerated repayment of its debts. Simply put, if the firm is in its development took the credit for N-th sum (and the sum of this, as a rule, little does not happen), then its liquidity is higher, the sooner she can, if necessary, to repay this loan. It is a kind of indicator of financial stability of the company.

Speaking generally, then this degree is measured by dividing the available company funds in the total amount of debt. If it is less than 0.2, this figure is extremely low. High rates will help the company "survive" in times of crisis or just in times of financial instability. Low also ensures the bankruptcy of almost any force majeure. Then the company would not last a few months.

Why is it so important to upgrade the liquidity of the enterprise? The issue here is not only how long I can sustain the organization in unforeseen crisis situations. The level of liquidity is one of the indicators that are important to potential partners. A profitable partnership it is important for any company, but if in the future it may be declared bankrupt, persons who can offer long-lasting and fruitful cooperation, in most cases will pass. The same goes for investors - there are few who are interested in the company with little liquidity, except that any other measures will be to inspire serious confidence. But many organizations can successfully exist only through investment.

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Therefore, improving the liquidity of enterprises is extremely important for the owner. This can be done through integrated solutions designed to improve the financial condition of the company and reduce debt. The principal measures by which to improve liquidity are as follows:
- the maximum possible reduction in the value of receivables;
- increase in profit;
- optimization of the capital structure of the enterprise;
- decrease in value of tangible assets.

A Separate question how to achieve it. To optimize production you need a competent control scheme, and if its compilation beyond the power of the owner, which is likely, then it is reasonable to spend the N-th sum and hire another employee - a talented professional who will create a working and generating additional income scheme.

Other ways of increasing liquidity of the enterprise - financial stabilisation and reduction of receivables. This can be achieved by analyzing the assets to their more rational distribution planning for all financial activities of the company and, in addition to planning and the deadlines of these plans. With regard to financial stability, we need a very sound approach, aimed at reducing monthly expenses. It is undesirable to do this at the expense of employee wages. You can find a lot of other clauses, on which the organization has the ability to save.

Increasing the liquidity of the enterprise also can be provided refinancing of receivables and acceleration of its turnover. Thus it is possible to increase the amount of financial assets. With regulations governing the reserves of the enterprise, optimize the material or commodity values. The feasibility calculations will also help in optimization.

Increasing the volume of products sold, you can expect to soon increase in liquidity. Actively applying the available funds, the firm can achieve growth in profitability and size of profits. The expansion of market will also help to increase the liquidity and solvency of a firm. Another important aspect is the increasing productivity of staff due to the more rigid, higher standards and penalties for violation.

If you have experience and economic education the owner can easily cope with the task itself. But the majority of these cases uses the services of economists and analysts. Generally, it contributes to the prosperity of the company.


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ZH: https://tostpost.com/zh/business/49528-what-measures-will-improve-the-company-s-liquidity.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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