Getting a Better Understanding of Asset Liquidation
You may have come across the statement “assets are being liquidated” in the news stories that talks about the financial failure of an organization or a company, or it can even be a personal insolvency case. But have you ever thought what it actually means? If a business is in a financial turmoil, and is failing time and again to pay its bills, then there a numerous options available to the company. It could ask for additional funding from its most loyal investors or try to raise money from conventional and alternative finance streams such as bank loans. On the opposite, the business owner could opt for selling a part of its business asset that may not be essential for the operation of the company. This will provide some injection of working capital so the business doesn’t get stopped and it can thus continue to trade. The act of selling asset and converting it into cash is called ‘liquidating’ the asset. When a business turns insolvent, meaning it becomes unfit to pay its debts, it i