Does Liquidity Really Matter?
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Liquidity has one essential rule: be liquid with appropriate working capital. Liquidity is a vital financial concept, as during good times, more expansion/growth opportunities exist due to it; during bad times, still more expansion/growth opportunities exist; liquidity provides revenue opportunities as commodities can be held through low prices; liquidity often reduces costs with lower interest rates; liquidity reduces stress; and during difficult times, sufficient cash stays in business (Birch, 2000). ”