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Financial planning liquidity

financial planning liquidity

Financial Planning Resources Advice Balance The - and

Understanding Financial Liquidity - Investopedia

financial planning liquidity

financial planning liquidity Formulating a Contingency Funding Plan to Manage Liquidity.

Liquidity may be an appealing characteristic for an investment, but a growing base of research is finding that illiquidity may be even more desirable. Ironically, demand for illiquid investments is so low, that they appear to carry persistent excess return premiums. This view has been popularized in recent years by people including David Swensen of Yale Endowment, who racked up a whopping 13.9% annual return for the past 20 years in large part by relying heavily on illiquid investments.

Of course, the first caveat to investing in illiquid assets is that it is only appropriate for the portion of a portfolio that the investor can afford to place into illiquid holdings. Yet the more significant (albeit more nuanced) danger is that the return premium is only beneficial for an otherwise sound investment. Owing a bad investment that is also illiquid just compounds the problem by locking the investor in.

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financial planning liquidity Formulating a Contingency Funding Plan to Manage Liquidity.

Liquidity planning

  • BusinessPlanner - your professional planning and controlling tool.
  • PlanungsWorkshop / Planning workshop - your door to financial planning.

Recognising potential

  • RatingBeratung / Rating advisory service - look at your company in a new light.
  • Working Capital Check - an overview of your liquidity potential.
  • Stress Simulation - look into the future with some simple scenarios.
  • Debt Capacity Calculator - work out your financing potential.
  • Industry Check - pinpoint your position among the competition.
With an individual financial plan, you obtain an overview of future changes in liquidity and investment options. This is illustrated in the chart below.

Financial Planning

As part of the financial planning process, we provide a detailed plan for the coming year and a rough overview for the next two to three years. We follow the principle of being as realistic as possible and as detailed as necessary. This process makes it easier to recognize problems early and to take the right corrective measures promptly. It also allows us to compare the target situation with the actual situation on an ongoing basis.

Liquidity planning means nothing less than ensuring that a company remains solvent at all times for the foreseeable future. Liquidity planning also gives you an overview of how much free liquidity can be managed in the short, medium, and long term.


Business Easy Overdraft Limit

Do you need more flexibility for payment orders?

Overdrafts are permitted with a Business Easy Overdraft limit, so you can easily avoid any liquidity bottlenecks.

Example of a combined Finance- and Liquidityplan including a Cash Flow Summary A) In a Excel Spreadsheet B) In our Treasury Software   A Financeplan is primary intended for a strategic longterm period  (more than a year) and also for a operational short-term period ->  Liquidity Plan. It is a basic requirement for the economical controlling  of the liquidity-risk! The financeplan is defined as a companies  forecast about the expected revenues and expenses in a specific  period, completed by the movement of payables and loan inventory. However, to obtain a best possible fx-hedging, natural or by  derivatives, such a finance plan can be used perfectly also as a direct fx-liquidity plan if this plan is segregated by currency!
Cash is the most liquid asset, while real estate, fine art and collectibles are all relatively illiquid.

Accounting liquidity measures the ease with which an individual or company can meet their financial obligations with the liquid assets available to them. There are several ratios that express accounting liquidity.


Cash is considered the standard for liquidity because it can most quickly and easily be converted into other assets. If a person wants a $1,000 refrigerator, cash is the asset that can most easily be used to obtain it. If that person has no cash, but a rare book collection that has been appraised at $1,000, they are unlikely to find someone willing to trade them the refrigerator for their collection. Instead, they will have to sell the collection and use the cash to purchase the refrigerator. That may be fine if the person can wait months or years to make the purchase, but it could present a problem if the person only had a few days. They may have to sell the books at a discount, instead of waiting for a buyer who was willing to pay the full value.


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