Finance Liability
By editor | November 14, 2007
A liability includes: personal capital, debts on medium and short term, risks or accidents supplies. Financial analysis must appreciate if the degree of assets liquidity in an organization is high enough in order to allow it face any time engagements assumed, respectively in order to assure its solvability.
Financial balance is appreciated by facing liquidity degree of assets with demand degree concerning liability elements.
In order to perform this analysis the following tools can be used: working capital and structure indicators.
The working capital is the safety margin which measures financial balance and it can be appreciated as the difference between permanent capitals and blocked assets, or as the difference between the flowing assets and short term debts. The working capital can have positive or negative values.
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Topics: Finance Valley |