#Liquidity101 for sale.

Liquidity is measured by the liquidity ratio, such as the current ratio which compares current assets to current liabilities. If the ratio is greater than 1, it indicates the institution's ability to cover its obligations.

Weak liquidity can lead to financial problems, even for profitable companies. On the other hand, excess liquidity indicates ineffective use of funds.

To increase liquidity, focus on improving cash flows, reducing unnecessary inventory, and managing debts effectively. Maintaining an appropriate level of liquidity ensures financial stability and flexibility to face challenges.