Title: Financial Analysis: Defining Liquidity and Working Capital Management | UniversalClass
Headings: 
Financial Analysis: Defining Liquidity and Working Capital Management
Current Assets
CASH CONVERSION CYCLE (CCC)

Content: Know short-term and long-term asset management ratios to control working capital and the firm's liquidity. II. Working Capital Management
Working capital management examines the relationship between short-term assets and short-term liabilities. The process oversees control of the firm's cash, inventories, and accounts receivable/payable. The intent of participating in working capital management is to ensure: operations continue
available business cash exceeds current liabilities
the firm can satisfy maturing short-term debt, as well as future, operational expenses
A working capital deficit in the short term impacts operations, as well as the firm's profitability. Long-term inefficiencies compromise the firm's credit worthiness, which impacts its ability to get low-interest loans and, consequently, to attract potential investors. Ratio analysis aids in identifying areas of weak or poor performance in management of the firm's cash, inventory, and accounts receivable/payable. A. Liquidity
The firm's ability to pay short-term debt and expenses (aka current liabilities) within the one-year operating cycle is its liquidity. Balance Sheet asset accounts are listed in order of liquidity.