What is Degree Of Relative Liquidity – DRL?
A liquidity metric that looks at a company’s ability to support short-term expenditures. Degree of relative liquidity is determined by looking at the total percentage of cash that a company has available on hand. The cash must be earned through regular operations and be able to be spent on expenditures and short-term debt obligations through a specific period.
Companies that possess a higher degree of relative liquidity will probably have less difficulty in retrieving funds for payment purposes. Read more for examples and further explanation including related video clips and also comments
Example explains Degree Of Relative Liquidity – DRL
As with all liquidity metrics, indications that a company is barely able to make short-term payments can be a sign that the company could be facing more serious financial issues in the long term. Financial distress as a result of inability to make debt payments could lead to bankruptcy.
[tubepress mode=’tag’, tagValue=’Degree Of Relative Liquidity – DRL invest’]