Which of the following is a step to solve a liquidity problem?

• A. Enforce a strict credit limit by insisting that debtors pay earlier
• B. Keep stock levels to a minimum, e.g., implement Just in Time
• C. Use sale and leaseback of assets
• D. All of the above

Answer: (D)

When facing a liquidity problem, the goal is to improve cash inflows and reduce cash tied up in assets. Asking debtors to pay earlier speeds up cash collections, which directly boosts available cash. Keeping stock levels low through a Just-In-Time approach reduces money tied up in inventory and lowers carrying costs, freeing cash for other needs. Selling assets and then leasing them back converts owned resources into cash while still allowing their use, providing an immediate liquidity boost with known future lease obligations. Each tactic tackles a different part of working capital, so using all of them together offers the broadest, most effective relief.