Finance
Liquidity ratio
Formal definition
Liquidity ratio is a measurement metric in finance focused on planning and monitoring financial resilience against delivery risk and income volatility.
What this actually means for you
Use Liquidity ratio to guide live decisions: set thresholds, review actuals versus plan, and escalate deviations before they become funding gaps, with ownership and reporting agreed at month-end and before trustee reporting cycles.
Example: In a live quarterly cycle, Liquidity ratio is applied like this: budget owners review forecast deltas each month and agree corrective actions before trustee pack deadlines. The team then records the decision trail in scorecards, board packs, and exception reports.
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