Accounts Receivable and Inventory Are Some of the Most Liquid

question 50

Essay

Accounts receivable and inventory are some of the most liquid assets a firm owns and their market values are typically fairly close to book value.Even so,in the eyes of many lenders,these assets make for inadequate collateral on loans,particularly if the business looking to borrow the money is in a liquidity crisis.Why do you think this is the case?

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Definitions:

Motor Vehicles

Wheeled vehicles that are motorized or engine-powered, used for transporting people or goods over land.

Firearms

Weapons capable of firing a projectile using an explosive charge as a propellant.

Drug Overdoses

The ingestion or application of a drug in quantities greater than are recommended or generally practiced, often leading to severe adverse effects.

Androgen

A type of hormone that plays a role in male traits and reproductive activity; testosterone is the most well-known androgen.