Accounts receivable and inventory are some of the most liquid assets a ﬁrm owns and their market
value is typically fairly close to book value. Even so, in the eyes of many lenders, these assets make
for inadequate collateral on loans, particularly if the business looking to borrow the money is in a
liquidity crisis. Why do you think this is the case?

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The Answer of Accounts receivable and inventory are some of the most liquid assets a ﬁrm owns and their market
value is typically fairly close to book value. Even so, in the eyes of many lenders, these assets make
for inadequate collateral on loans, particularly if the business looking to borrow the money is in a
liquidity crisis. Why do you think this is the case?

Accounts Receivable and Inventory Are Some of the Most Liquid