1. Liquidity in a broad sense: refers to all current assets of an enterprise, including cash, inventory (materials, products in process and finished products), accounts receivable, securities, prepayments and other items. All the above items are necessary for business operation, so working capital has a popular name, called working capital.
2. Liquidity in a narrow sense = current assets-current liabilities.
Liquidity calculation method:
1, itemized detailed estimation method
According to the relationship between turnover and turnover speed, the itemized detailed estimation method estimates the current assets and current liabilities that constitute working capital respectively. According to "Method and Parameter III", the content of working capital has changed, and the calculation formula is as follows:
(1) Liquidity = current assets-current liabilities, in which:
(2) Current assets = accounts receivable+prepayments+inventory+cash.
(3) Current liabilities = accounts payable+accounts received in advance
(4) Annual liquidity investment (advances) = liquidity demand this year-liquidity investment as of last year = liquidity demand this year-liquidity demand last year.
2. Extended index estimation method.
The extended index estimation method is to obtain various liquidity ratio indicators according to the actual data of existing enterprises, and multiply various liquidity ratios by the corresponding cost base to estimate liquidity. Calculation formula:
(1) Annual liquidity is equal to the annual expense base multiplied by various liquidity ratios.
(2) the annual liquidity is equal to the annual output multiplied by the amount of liquidity occupied by the unit product output.
To sum up, the company's working capital is in the form of current assets, that is, the total assets that an enterprise can realize or consume in a production cycle of one year or more.
Legal basis:
Article 3 of the Interim Measures for the Administration of Working Capital Loans
Working capital loans refer to local and foreign currency loans issued by lenders to enterprises (institutions) legal persons or other organizations that can be used as borrowers as stipulated by the state for the daily production and operation turnover of borrowers.