Liquidity
Ability to meet short-term financial obligations; having cash/convertible assets available.
Real World
HMV was profitable on paper for years but collapsed in 2013 partly due to liquidity problems — it had assets but couldn't convert them to cash fast enough to pay creditors.
Exam Focus
Use the HMV-style argument in 'evaluate' answers: profitable businesses can still fail — always separate profitability from liquidity.
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