Instructions for main discussion post (Around 250 words)Please, write a discussion post about the...

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Instructions for main discussion post (Around 250 words)
Please, write a discussion post about the below topic/Statement.
Topic/Statement: The two major sections of credit analysis are liquidity analysis and solvency analysis. For this discussion question, the focus is liquidity. Liquidity refers to the availability of resources to meet short-term cash requirements. Please keep this definition in mind as you answer the following question.
Why is liquidity important in the analysis of financial statements? Explain its importance from the viewpoint of more than one type of user.
(1 or 2 Citations needed for main post)

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Khushboo · Accepted Answer

Liquidity and its importance:
Liquidity is the indicator of the ability of the entity to tackle its current or short term obligations from its current assets.  Thus the entity which is in weak short term liquidity position which face difficulty in tackling its short term obligations and similarly when the entity is having good liquidity then it can easily meet its current obligation as it is having sufficient funds (Burke, Alex). Thus the liquidity will have implications for the current and potential shareholder of the entity.

Instructions for main discussion post (Around 250 words) Please, write a discussion post about the below topic/Statement. Topic/Statement: The two major sections of credit analysis are liquidity...

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