Where the forms operate under political and economic pressures and suffers from liquidity problem and is interested in quick recovery of funds and profitability the most suitable method is?
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Following is the detailed explanation of the question.
Step-by-step explanation:
Liquidity crisis is an economical term. It refers to shortage of funds/money problems that may be related to marketing or accounting. Liquidity problems and solvency problems are interrelated and resemble so much that it hard to determine the root cause of the problem.
Example of liquidity is: If a person wants a $5,000 Television then cash is an asset through which he/she can easily buy it.
Following are the way through which such problems can be sorted:
- Set longer terms with manufacturers i.e resulting in keeping your money to yourself longer.
- Go through accounts routinely
- Pay bills regularly.
- Get rid of unproductive assets.
- Increase prices of your products regularly according to requirements.
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