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Liquidity Order Of Current Assets

oboloo Glossary

Liquidity Order Of Current Assets

Liquidity Order Of Current Assets is a financial term used to describe the ease with which current assets can be converted into cash. Essentially, it’s a measure of an organization’s ability to meet its short-term obligations and manage its working capital. It is based on the ordering of current assets from the most liquid (cash) to the least liquid (inventory). The higher the liquidity order of an organization’s current assets, the easier it is for them to generate cash when needed. Put simply, Liquidity Order Of Current Assets is a business’s lifeline – so make sure you stay on top of it!

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