When the accounting rule-makers mandated the statement in 1971, working capital was considered a good measure of a company's liquid position.
While Block Expansionists may applaud locked-in stock positions as "patient capital," institutions want fairly liquid positions in order to meet redemption requests from clients or to reduce exposure to a particular industry.
This work reports numerical and experimental investigations of capillary stop valves, which simply rely on the sudden expansion of a microchannel to control the liquid position.
Though no one at Navistar can prove it, they strongly suspect that the stock has been hammered because hedge funds, badly hurt during this phase of the financial crisis, have been forced to sell some of their more liquid positions to return money to exiting shareholders.
Instead of trading a large number of small, liquid positions, the funds can buy and own smaller numbers of large, illiquid positions in a form where they (or, more likely, their agents) participate more actively with management in the control of the assets.
For example, emergency funds need to be in money markets, savings or other short-term, liquid positions.
"Our ambition is to become a full-service retail bank to rival the big four," a Virgin Money spokesperson said, pointing to the bank's "very well capitalised and highly liquid" position.
While managers can, and some have, put up gates to limit redemptions, they may also be running out of liquid positions to exit even with curbs to keep money from tumbling out of their funds all at once.
Or, as we have confirmed with calls to brokers we know, Monday was a major day of margin calls, when folks are forced to sell their more liquid positions to appease the margin clerks.
Harvard endowment chief Jane Mendillo recently admitted in a report that "with perfect hindsight, we and most other investors would have started this year in a more liquid position and with less exposure to some of the alternative asset categories that were hardest hit".
