- while the first go to adapting with investment,growth, and then the financial leverage ,the second go to high liquidity
- but investment in liquidity can be avoid risks when there is high country risks by trade in equity
- so what is the different,if both yield earning
- is the financial flexibility deal with long and financial slack deal with short range ? if so current ratio can be differentiation between short to and long range when it connected with size and growth
Imran Khan
Financial flexibility refers to the company's capacity to raise fund in difficult times.
whereas financial slack is the extra cash holding for unexpected losses and to survive in difficult times. In financial slack the company hold unutilized cash, whereas in high financial flexibility the company doses not need financial slack, because the company can raise fund in no time
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Sayed Mohammad Tariq Zafar
We can also check the source and use of funds.
In general Flexibility reflect the financial strength and market standing of the company's.
Financial slack reflect company efficiency in handling the cash.
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