Liquidity as Lever for Achieving Top Company Goals

Abstract

Although the speed of turnover of certain types of assets is not an end in itself, it can be claimed that it is a lever for achieving top company goals – maximizing profit in the long run. Illiquidity is often the cause of the debt crisis that has engulfed the budgets of certain countries as well as companies (real sector). In theory and practice, there are different understandings of the term liquidity, as well as its importance for the healthy growth and development. The paper points out the differences in the understanding of this term and the different concepts of pursuing liquidity policy, using methodologies of determining the liquidity and solvency of the companies (enterprises). Based on the methodological and theoretical aspects, the liquidity situation of the economy of the Republic of Srpska has been analyzed which can be useful for policymakers of the Republic of Srpska.

Keywords

• liquidity
• illiquidity
• solvency
• insolvency
• financial balance
• net working capital