Factors Decreasing the Internal Value of the Liquidity

Abstract

To set the optimal level of the financial liquidity in the firm, it is necessary to have the information about the internal value of the liquidity. The internal value of the liquidity in the firm is relative to level of the liquidity plus eight other factors. Three of them are decreasing internal value of liquidity. The article contains consideration concerning these factors and activities of the management of the firm resulting from the observations of the factors.

Keywords: Value of liquidity, Value based management, Liquidity measures, Demand for Liquidity, Liquidity balances, Risk, Uncertainty, Real Options, Option Value of Liquidity, Short-Term Financial Management, Working Capital Management

JEL Classification: G39, G32, G11, M11, D81, O16, P33, P34