cap

Capital

There are different types of capital:
• Short-term capital needs is the availability of cash as the company needed to cover the interim payments to suppliers, salaries, etc.
• Long-term capital needs is the availability of cash as the company needed to manage the necessary investments in product development, marketing, machinery, buildings and other fixed assets.
• Security Capital is the extra buffer that the company needs to manage any disruptions in ongoing operations, such as a major engine failure or a temporary dip in sales.
Liquidity

The concept of liquidity comes from the word liquid, ie liquid, which also gives a hint about what this is about. In contrast to equity ratio as is the liquidity of money used to pay bills, salaries and other expenses. Unlike the fixed assets, this is money that is readily accessible. This liquidity is not necessarily earned money but may well be some form of credit that you use to balance income and expenditure.