What We Learned This Week
Lovely country scene, and I am lucky enough to be able to walk through this – with care. While some are enjoying the stereotypical beach and sunshine in August, others are working all the hours they can, like these guys near me. They are up against it too, with the uncertain weather forecast stereotypical of the UK. We should be doing at least one of three activities in August: harvesting (see above) the fruits of our labours, sowing for a future harvest, or maintaining ourselves (Covey’s Sharpening the Saw), so we are ready to sow and/or harvest. I got my holiday in July. Not much training to deliver this month, which means a great opportunity to sow. Make sure you take your opportunities this week.
Buzzword of the Week
Liquidity
Definition – how quickly can you turn assets into cash? In business, this translates as having enough money to pay your bills when you should pay them.
Alternative View – a screaming red indicator in some businesses this week (e.g retailers Jack Wills in UK & Barneys in US). Can be measured by Liquidity ratio (also known as Current ratio/Working Capital Ratio, and some would argue Quick/Acid Test Ratios) which look at Short Term (Current) assets to ST Liabilities. But this is 2019 – have you seen the interest rate outlook? Who needs cash in the bank account? Too much and shareholders want it back (through buybacks maybe), too little and you cant pay those pesky bills. It needs closely watching…