The Importance of Liquidity
Global cash visibility has been a mantra for companies for many years.
No doubt it is a worthy goal, but then business has a lot of goals. Why should this one be treated as more important than others, say one like “global profitability”?
As the last few years have shown liquidity is as important as profitability; low profitability hurts, but lack of liquidity kills. If your company has been told by its counter parties that it has no / restricted access to the external capital markets then negotiating a price or terms will not be the key issue. In other words, not having “enough” liquidity (e.g. bank borrowing) could doom a company to becoming a second class one.