Liquidity, solvency, profitability, and operating efficiency

Respond to two or more of your colleagues’ posts in one or more of the following ways: (150 words each Colleague)
• Offer an insight you gained from your colleague’s definition of financial health and the factors that they determined should be considered in assessing an organization’s health.
• Offer an insight you gained from your colleague’s analysis of the financial practices of an organization.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you have learned or any insights you have gained as a result of the comments your colleagues made.

1st Colleague to respond to:
Briefly define, in your own terms, what financial health means from an organizational standpoint. Include in your definition the specific factors that would be taken into consideration when assessing an organization’s financial health and stability. In other words, what would you need to show to demonstrate that an organization is healthy?
Financial health for an organization is when the business is in stable condition. No debt, all bills are paid in an orderly fashion (on time), and accounts are maintained properly. Proof would be all the paperwork from finance when the company is being audited. The employees have to be sure all monies are accounted for.
Liquidity, solvency, profitability, and operating efficiency are important areas to consider, and all should be considered in combination. Liquidity is a key factor in assessing a company’s basic financial health. Liquidity is the amount of cash and easily-convertible-to-cash assets a company owns to manage its short-term debt obligations (Maverick, 2022).
Identify two or more financial practices (good or bad) of an organization with which you are familiar, and categorize each practice based on your definition of organizational financial health, including a rationale for each categorization. Be sure to provide specific examples.
A financial practice that was bad for the business was when I was balancing our managers company credit cards and I brought it to their attention that a lot of the places they were purchasing at didn’t have relevance to the business. I did this because the credit cards transactions needed a description in order to submit. The staff would tell me that it was for this and that, but they actually used it for personal uses.
Another example was when the craft employees in the field would constantly order tools even though we had some in storage, they’d rather go and purchase a new one. After close monitoring, we lost out in hundreds or thousands of dollars and in the end the project actually went negative and owed in penalties.

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