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: 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. The first category of current assets addresses items that can be converted into cash within the normal one-year operating cycle. Total assets are funded through liabilities or stockholders' equity. Current liabilities, which must be paid within one year, are paid out of current assets. Noteworthy current assets, in addition to cash, include: Marketable Securities - temporary investments of excess cash
Accounts Receivable - which include an allowance for bad debts to determine their collection value
Inventory - raw materials, goods in process, or finished goods
Prepaid Expenses - future expenses that have already been paid (i.e.: