Ethical business and Liquidity: Difference between pages

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As defined by the Institute of Business Ethics (IBE), ''ethical business'' includes, but goes beyond, [[business ethics]].
1. ''Assets.''


According to the IBE, whether an organisation is judged to be an ethical business 'is a matter of opinion, based on what the business does and why; for example, the nature of its products and services. In addition to how the organisation does its business - business ethics - other considerations for an ethical business are its reputation among its stakeholders, and the way it treats customers and staff.'
An asset's ability to be turned into cash quickly and without significant loss compared with current market value.


The IBE cites examples of activities which some consider to be unethical, including fuel extraction, tobacco and gambling. According to the IBE, organisations involved in these types of activity may still carry out their business according to a set of ethical values and business ethics.
Cash itself is the most liquid of assets.


Such organisations would illustrate the distinction between business ethics and ethical business.
After that, the next most liquid asset is often high quality central government debt, for example gilts.




==See also==
2. ''Markets.''
* [[ACT Competency Framework]]
 
* [[Ethics and corporate governance]]
In relation to a market, the extent to which large quantities of the asset traded in the market can be bought or sold at any time, with low transaction costs, and without affecting the market price.
* [[Business ethics]]
 
* [[Technical skills]]
 
3. ''Short-term financial health.''
 
An entity’s ability to pay its obligations when they fall due, especially in the short term.
 
 
4. ''Medium-term financial health.''
 
An entity's ability to source additional funds to meet its obligations, including in the medium and longer term.
 
 
5. ''Financial measures.''
 
A financial measure designed to quantify an entity's ability to meet its obligations when they fall due.
* For non-financial organisations, simple measures of liquidity include the ''current ratio'' and the ''quick ratio''.
* For banks and other financial institutions, liquidity measures include those which identify how long the bank could survive if wholesale funds were to dry up and retail funding was heavily stressed. This period is known as the ''survival period''.
 
 
== See also ==
* [[Authorisation]]
* [[Authority limits]]
*[[Cash]]
* [[Cash and cash equivalents]]
*[[Cash balance]]
*[[Cash flow]]
* [[Cash forecasting]]
* [[Cash pool]]
* [[CRD IV]]
* [[Current ratio]]
* [[Deep market]]
* [[Emergency liquidity assistance]]
* [[Flight to liquidity]]
* [[Funding]]
* [[Funding liquidity risk]]
* [[Funds]]
* [[Gilts]]
* [[Headroom target]]
* [[Illiquid]]
* [[Individual Liquidity Guidance]]
* [[Insolvency]]
* [[Leverage]]
* [[Liquid]]
* [[Liquidate]]
* [[Liquidation]]
* [[Liquidity buffer]]
* [[Liquidity Coverage Ratio]]
* [[Liquidity fee]]
* [[Liquidity Fund]]
* [[Liquidity gap]]
* [[Liquidity insurance]]
* [[Liquidity investment]]
* [[Liquidity management]]
* [[Liquidity preference]]
* [[Liquidity premium]]
* [[Liquidity risk]]
* [[Liquidity run]]
* [[Liquidity stress]]
* [[Liquidity upgrade]]
* [[Market liquidity risk]]
* [[Money management]]
* [[Net Stable Funding Ratio]]
* [[Quick ratio]]
* [[Run]]
* [[Security]]
* [[Solvency]]
* [[Stress]]
* [[Supply chain finance]]
* [[Survival period]]
* [[Yield]]
 
 
== Other resources ==
* [https://www.treasurers.org/hub/treasurer-magazine/liquidity-first-three-tips-for-treasurer Liquidity first: three tips for treasurers, The Treasurer Web exclusive, 2020]
 
*[[Media:2015_06_June_-_Safety_first.pdf| Safety first, The Treasurer, 2015]]
 
[[Category:Liquidity_management]]

Revision as of 09:45, 21 July 2022

1. Assets.

An asset's ability to be turned into cash quickly and without significant loss compared with current market value.

Cash itself is the most liquid of assets.

After that, the next most liquid asset is often high quality central government debt, for example gilts.


2. Markets.

In relation to a market, the extent to which large quantities of the asset traded in the market can be bought or sold at any time, with low transaction costs, and without affecting the market price.


3. Short-term financial health.

An entity’s ability to pay its obligations when they fall due, especially in the short term.


4. Medium-term financial health.

An entity's ability to source additional funds to meet its obligations, including in the medium and longer term.


5. Financial measures.

A financial measure designed to quantify an entity's ability to meet its obligations when they fall due.

  • For non-financial organisations, simple measures of liquidity include the current ratio and the quick ratio.
  • For banks and other financial institutions, liquidity measures include those which identify how long the bank could survive if wholesale funds were to dry up and retail funding was heavily stressed. This period is known as the survival period.


See also


Other resources

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