ABSTRACT
The liquidity (or solvency) of an organisation can be dened as its ability to pay its debts. However, that denition is far too vague; it is not just a matter of being able to pay debts but being able to pay them when they fall due. An organisation may appear from its statement of nancial position to have insucient resources to meet its liabilities, but that does not mean that it is insolvent.
