Liquidity Junction Why does a profitable plant stop producing? Sardar Khalidi/Editorial Secretary Manufacturing plants have orders, their products are sold and their operations are profitable, but the problem is not the lack of raw materials, but the lack of sufficient resources to buy raw materials and continue production. The crushed bones of the manufacturing sector describe the situation like this: company resources are caught up in the demands of buyers and inventory, while the due date for the payment of salaries, debts and production costs approaches. On the other hand, inflation increases the need for working capital. The company must spend more money to produce the same amount of product, but revenue from previous sales is delayed and it may not have enough purchasing power to replace raw materials. The difficulty in obtaining bank credit can also intensify this pressure. In response to how the capital locked up in companies can be released, two issues must be separated. When checking the financial statements and balance sheets of companies, two indicators of an increase in the debt of the companies and simultaneous inflation of the assets stand out. All companies (large, medium and small) on the one hand, due to the claims they have from the place of sale of the products, goods or services, their assets increase, and on the other hand, their liabilities increase due to credit purchases or obligations to suppliers or facilities and loans received by financial institutions (banks and credit institutions). One of the reasons for locking up funds in companies from a financial point of view is that a significant part of the company's assets is not liquid. Companies are unable to get cash for selling their products due to economic conditions and recession or inflation. Generally, the main sales of companies, except in limited cases, such as products with fast consumption or high turnover in other cases, is in the form of credit and time. Consumer goods are products that are sold quickly and at a relatively low price. Non-perishable products such as packaged foods, beverages, sanitary items and non-pharmaceutical drugs are among these products. An effective policy should be based on two complementary paths.

Liquidity Junction Why does a profitable plant stop producing? Sardar Khalidi/Editorial Secretary Manufacturing plants have orders, their products are sold and their operations are profitable, but the problem is not the lack of raw materials, but the lack of sufficient resources to buy raw materials and continue production. The crushed bones of the manufacturing sector describe the situation like this: company resources are caught up in the demands of buyers and inventory, while the due date for the payment of salaries, debts and production costs approaches. On the other hand, inflation increases the need for working capital. The company must spend more money to produce the same amount of product, but revenue from previous sales is delayed and it may not have enough purchasing power to replace raw materials. The difficulty in obtaining bank credit can also intensify this pressure. In response to how the capital locked up in companies can be released, two issues must be separated. When checking the financial statements and balance sheets of companies, two indicators of an increase in the debt of the companies and simultaneous inflation of the assets stand out. All companies (large, medium and small) on the one hand, due to the claims they have from the place of sale of the products, goods or services, their assets increase, and on the other hand, their liabilities increase due to credit purchases or obligations to suppliers or facilities and loans received by financial institutions (banks and credit institutions). One of the reasons for locking up funds in companies from a financial point of view is that a significant part of the company's assets is not liquid. Companies are unable to get cash for selling their products due to economic conditions and recession or inflation. Generally, the main sales of companies, except in limited cases, such as products with fast consumption or high turnover in other cases, is in the form of credit and time. Consumer goods are products that are sold quickly and at a relatively low price. Non-perishable products such as packaged foods, beverages, sanitary items and non-pharmaceutical drugs are among these products. An effective policy should be based on two complementary paths.