Liquidity 2.3.2
Liquidity - means the ease and cost with which assets can be turned into cash and used immediately as a means of exchange. Statement of financial position (balance sheet) - A formal financial document that summarises the net worth of a business at a given point in time. It balances net assets (what you spent the money on?) with total equity (where you got the money from?) Assets - include all things that could be of benefit to the organisation. Those that appear on the statement of financial position are the ones that can be given a money value Liabilities - includes all debts that must be repaid at some point in the future. Assets are items of value owned by a business Liabilities are the money a business owes i.e. debts Non – current (fixed) assets Likely to be kept by the business for more than one year Current assets Likely to be turned into cash within a year Non – current liabilities Debts that the ...