What Is a Liquidity Fund?

Working capital refers to the working capital of an enterprise. Liquidity is a manifestation of current assets, that is, the total amount of assets that an enterprise can realise or consume within a production cycle of more than one year. ^{[1] In a} broad sense, liquidity refers to all current assets of an enterprise, including cash, inventory (materials, work in progress, and finished products), accounts receivable, securities, advance payments, and other items. The above items are necessary for business operations, so the working capital has a popular name, which is called business working capital. Narrow liquidity = current assets-current liabilities. This is the so-called network capital. According to this definition, in addition to current liabilities, the source of funds for current assets should be sourced separately. The amount of net liquidity represents the liquidity status of the enterprise. The more net liquidity is, the more net liquid assets are, and its short-term debt repayment ability is strong, so its credit status is also high. It is easier to raise funds in the capital market and the cost is low.

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From the perspective of the turnover of production funds of enterprises,

The shape of liquid capital occupation is volatile.

It is necessary not only to ensure the needs of production and operation, but also to save and rationally use funds.

Assets must be managed when managing funds.

The working capital is used for operational turnover and should have a cycle. The length of the cycle is related to the cost of funds and the efficiency of use. Assume that the micro company that produces personal computers has a predicted market demand of 100 units. The following steps determine the future

Itemized detailed estimation

The detailed itemized estimation method is based on the relationship between turnover and turnover speed.

Current assets refer to the physical part of liquid funds, which is the main content of national property. It is a product that will withdraw from the production process at a certain point in time but does not enter the consumer domain and temporarily withdraws from the production process as a final product. It will continue to play a role in future production. Physical products. The main difference between it and liquid funds is that they include different scopes. Liquidity covers a wide range. It is the monetary performance of liquid assets plus financial assets. The current assets include physical liquid assets, but do not include financial assets, such as cash on hand and bank deposits.