Gross domestic product and Liquidity: Difference between pages

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(GDP).  
1.  


A measure of the monetary value of total output of finished goods and services produced using factors of production located in the country whose GDP is being measured in the time period over which it is being measured.  
An asset's ability to be turned into cash quickly and without significant loss compared with current market value.


It is commonly measured in three ways.
#An output measure: the value of goods and services produced by all sectors of the economy, often taken as agriculture, manufacturing, energy, construction, the service sector and government.
#An expenditure measure: the value of the goods and services purchased by households and governments, investment in machinery and buildings and exports minus imports.
#An income measure: the value of income generated mostly in terms of profits and wages.


2.


In principle the three methods should produce the same answer, but they are each estimated in ways that are practical but not quite fitting the theory.  
An entity’s ability to pay its obligations when they fall due, especially in the short term.


Indeed how the theory should be applied is often disputable.


Some of this is discussed in the article on [[inflation]].
3.  


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


GDP equivalents can also be estimated for regions, or indeed the entire world.
 
4.
 
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 ==
== See also ==
* [[Double dip]]
* [[Authorisation]]
* [[Gross national product]]
* [[Authority limits]]
* [[Recession]]
* [[Cash and cash equivalents]]
* [[Inflation]] -  see 'Points to note'
* [[Cash forecasting]]
* [[Black economy]]
* [[Cash pool]]
* [[Gross National Income]]
* [[Current ratio]]
* [[Deep market]]
* [[Funding]]
* [[Headroom target]]
* [[Illiquid]]
* [[Liquidate]]
* [[Liquidation]]
* [[Liquidity buffer]]
* [[Liquidity Coverage Ratio]]
* [[Liquidity preference]]
* [[Liquidity management]]
* [[Liquidity premium]]
* [[Liquidity risk]]
* [[Money management]]
* [[Net Stable Funding Ratio]]
* [[Quick ratio]]
* [[Run]]
* [[Security]]
* [[Solvency]]
* [[Stress]]
* [[Supply chain finance]]
* [[Survival period]]
* [[CertICM]]
* [[Yield]]
 
 
=== Other resources ===
*[[Media:2015_06_June_-_Safety_first.pdf| Safety first, The Treasurer, 2015]]
 
[[Category:Liquidity_management]]

Revision as of 11:53, 17 November 2016

1.

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


2.

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


3.

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


4.

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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