Business Management Guidelines

Posts Tagged ‘Bankruptcy’

With liquidity in everyday language we often think the presence of a sufficient quantity of money. More generally, the term refers to the ability to present an economic market in the economy as quickly as possible in against another. Besides the pure presence of money means the availability of exchange partners who are ready for the transaction of goods for cash.

Liquidity in Business Administration

An economic definition of liquidity is very close to the everyday language. Here it is important that an economic agent is able to meet its financial obligations on time and complete.

Lack of liquidity of a company often results from faulty or inadequate liquidity planning. It is one of the leading causes of bankruptcy. On the other hand, a too high liquidity in terms of profitability to be disadvantageous. Since it is accompanied by an accumulation of ill-invested cash, is in favor of the liquidity waived interest and part of the property is lost due to inflation.

Liquidity levels are a means to calculate the liquidity of a company. Here are positions of the asset side the positions of the capital side in a horizontal balance sheet analysis compared. A distinction is dynamic liquidity and net liquidity.
The calculation of dynamic liquidity allows the probable settlement of liabilities for a period of one to three months predict.

The formula for calculating the dynamic liquidity is:
= dynamic liquidity (cash assets estimated revenues) / current liabilities

The formula for calculating the liquidity period is:
The term liquidity is calculated by the ratio of outputs necessary payment and expected receipts of the relevant period.

We know that life must go on after the bankruptcy. Yet, of course, we must ready to face the reality that getting our finances and credit back on track is not as easy as what we may get before the bankruptcy. Even if our entire plan has been completed and the court has decided to discharge all of our previous debts, it will be still difficult to get our credit scores back to normal. As we know, credit scores are the scores which used by the bank or lending institution to determine the degree of our economic capability, to make sure whether we are at risk or not to lend to.

After the bankruptcy, it probably needs two or three years to get your credit score back to normal. It is good to take out a bank loan or a credit card and be sure to carefully pay it on time every month. A new good record on the payment will improve your credit scores. You may take multiple credits at the same time; because it will regain your scores also.

A multiple loan which always paid diligently every month will proof your economic potency. However, always remember to limit the number of the credit you take, because too much credit will not only add new economic burden, but also make your score worse. We have to keep an eye on the scores and at the same time, take good steps to get it back to normal.