Lesson 1 of 3
7 minLiquidity and reserves
What it is
Liquidity describes assets that may be available without a long conversion process. Reserves are funds retained for future obligations or uncertainty.
Why it matters
Both help explain capacity to manage costs beyond the immediate transaction.
Simple example
Cash needed at closing and post-closing reserves are different uses and should be shown separately.
What may be reviewed
- Cash
- Eligible liquid assets
- Closing needs
- Post-close reserves
Common mistakes
- Double-counting the same funds
- Including inaccessible assets without explanation
Your next step
Create a sources-and-uses view showing exactly where each dollar is expected to come from and go.