What is Liquidity Management?

Liquidity management is the process of ensuring a company has enough liquid assets (e.g., cash, marketable securities) to meet its short-term obligations as they come due. It involves forecasting cash flows, managing working capital, and optimizing investment strategies to maintain an adequate level of liquidity while maximizing returns. Effective liquidity management is crucial for a company's financial stability and its ability to seize opportunities or weather unexpected financial challenges.