Liquidity as a key characteristic of the financial condition of the organization

Abstract

In the system of financial management of an organization in recent years, more and more attention is paid to the rational organization of financial flows, which have a significant impact on the final results of its financial and economic activities. Such a system is created with the aim of more rational use of the organization’s assets and sources of their formation, ensuring liquidity and solvency, minimizing the risks of the organization’s activities and optimizing the costs of financing its financial and economic activities. The problem of liquidity management occupy a special place in the financial management system of any organization. The hallmark of a reliable and sustainable organization is its ability to meet its obligations on time and in full. At the same time, regardless of the stage of the life cycle in which the organization is located, management is forced to solve the problem of determining the optimal level of liquidity, since, on the one hand, insufficient liquidity of assets can lead to both insolvency and bankruptcy, and on the other hand, excess liquidity can cause a decrease in profitability. Due to this, modern practice requires the emergence of more and more advanced procedures for analyzing and diagnosing an organization’s liquidity.