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BuyThatFranchise.ca - Franchise News

Question

What is liquid capital?
Mohammed H - Mississauga, ON

Answer

“Liquid capital” refers to cold, hard cash (not borrowed!) or assets that you can readily convert to cold, hard cash (stocks, bonds, term deposits and so on). This is to differentiate between collateral assets such as real estate that may not be sold (hence converted to cash) as easily. The availability of liquid capital is a key preventive control for any business to absorb sudden and unexpected shocks.

The answer to this question was provided courtesy of: Perry Maisonneuve.
Perry Maisonneuve can be reached via email: jpmaisonneuve@FranchiseServices.ca or by visiting his website: www.franchiseservices.ca