DEALING WITH LIQUIDITY

PROBLEMS
What is liquidity?

• Liquidity refers to the ease of which a business

can convert assets into cash

• If a business does not have

many assets that they are
able to convert into
cash, they are said to
have liquidity problems.
How do we solve it?
• There are many ways to deal with liquidity
problems. These ways can be split into 3 main
categories:

1) Seeking alternative sources of finance

2) Improving cash inflows
3) Reducing cash outflows

• Within each category, there are various options

that could be used.
Task:

Form groups of three. Each person in the group will

become an ‘expert’ on one category. Use pages 370-
372 of your text to construct a notes/information
page on your allocated category.

Then, teach the other group members about your

category. Explain the details and allow them to take
notes.

By the end of the activity, each person should have a

full set of notes on Dealing with Liquidity Problems.