Liquidity refers to a company's ability to meet its short-term financial obligations as they come due. It is an important aspect of a company's financial health, as it can affect the company's ability to pay its bills, invest in growth, and maintain financial stability.
There is a relationship between liquidity and a company's profitability. In general, companies with strong liquidity are better able to weather financial challenges and are more likely to be profitable over the long term. This is because they have the resources they need to meet their short-term obligations and take advantage of opportunities as they arise.
On the other hand, companies with weak liquidity may struggle to pay their bills on time and may have difficulty taking advantage of growth opportunities. This can negatively impact their profitability and financial stability.
There are several ways that a company can improve its liquidity. These include:
- Managing its current assets and liabilities effectively: By carefully managing its current assets (such as cash, accounts receivable, and inventory) and minimizing its current liabilities (such as accounts payable and short-term debt), a company can improve its liquidity.
- Maintaining a strong cash flow: By generating consistent and predictable cash flow, a company can ensure that it has the resources it needs to meet its short-term obligations and take advantage of growth opportunities.
- Using financial tools such as lines of credit: These can provide a company with a source of short-term financing to help manage its liquidity needs.
Overall, maintaining strong liquidity is important for a company's profitability and financial stability. By effectively managing its liquidity, a company can ensure that it has the resources it needs to meet its short-term obligations, invest in growth, and weather financial challenges.
- The company will be able to optimize the asset site of its balance sheet, by
- Optimizing working capital using PRI® CrediSoft;
- Monetizing open account receivables through PRI® inside;
- And will be able to reduce funding costs
- As part of the trade-off between direct payment of invoices of creditors and payment discount optimizing the credit site of the balance sheet using PRI® Supply Chain;
- And creditors will monetize the account receivables and in addition can optimize working capital using PRI® CrediSoft.
Qube added value
- Qube Financing (and its affiliates) have developed the Qube platform, supported by its proprietary PRI® inside infrastructure, front-end to back-end fully automated receivables financing platform (“Qube Platform”), as one of the earlier Fintech 3.0 initiatives in the market and is fully equipped to be the winning platform of the third wave.
- This Qube Platform is fully operational and has been fully adopted by institutional investors, including the standardized procedures, ‘modus operandi’ and underwriting process steps & criteria.
- Qube targets European SME and Mid Market Corporates with a fully standardized approach as well as tailored solutions for multinationals, predefined underwriting criteria that are agreed with institutional investors and supported by PRI® inside and the add-on credit & collection management application PRI® CrediSoft and PRI® Supply Chain.
- Offering consolidated multi jurisdictions multi operating companies fully automated working capital financing solutions based on invoiced turnover, whereby PRI® inside directly interfaces with the Corporate's ERP systems, the Connection.
- The Qube Platform benefits from a modular design and standardized processes and legal infrastructure.
US version of PRI® infrastructure can be calibrated for US time zone and jurisdiction.