Liquidity is an important measure of your company’s financial health. This calculation determines how well you can pay off your short-term debts. There are a few different ways to measure liquidity. Your company’s inventory impacts its liquidity differently depending on which calculation you use. The correct measure of inventory’s impact on liquidity depends on the type of inventory your company sells.- DAVID RODECK.
Source- https://smallbusiness.chron.com/inventory-impact-liquidity-business-42746.html