What term is used to describe the availability of resources to meet short-term cash requirements?

The term that describes the availability of resources to meet short-term cash requirements is liquidity. Liquidity refers to how easily assets can be converted into cash without significant loss of value. In business, maintaining liquidity is critical because it ensures that an organization can meet its immediate financial obligations, such as paying suppliers, employees, and other operational expenses.

Profitability, while essential for long-term sustainability, focuses on the revenue generated by the business relative to its expenses, not specifically on cash on hand. Equity pertains to the ownership value in the business after liabilities are subtracted from assets, and cash flow refers to the total amount of money being transferred in and out of a business, which encompasses both operational cash flow and investment cash flow—not strictly the availability of resources at a specific point in time for short-term needs. Therefore, liquidity is the most accurate term for describing the immediate cash resources available to meet obligations.