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hi guys its MJ and in this video I want to talk about liquidity risk and give you some sort of introduction to one of the most popular risks that a majority of businesses have to face so how can we think of liquidity risk I want to draw two diagrams for you and they were gonna chat about them so this diagram represents time and this is positive amounts and that is negative amounts and now how business works is that you go along and you make some money at various times by selling goods rendering your services all those other things so this is money coming into your business but running a business also means you have to pay your staff and you have to pay your rent and maybe theres a disaster and you have to make various payments to other people and these are known as cash outflows so we have cash outflows and we have cash inflows now when it comes to say what is the profitability of a company profitability is if the inflows are greater than the outflows okay but the quiddity risk looks
