Liquidity Risk

Debtors ageing budget

The historical records show that the debtors balance at the end of each quarter is usually about 20% of the

quarter's sales. At any time in the debtors balances 1% of the total debtors is overdue 90 days and over, 5% is 60

days overdue, 10% is 30 days overdue and the balance of the total debtors is current. The aged debtors' budgets

are only distributed to the accountant and the accounts receivable clerk.

AGED DEBTORS BUDGET Qtr 1

Sales 3,371,200

% Debtors Sales 22%

Total Debtors 741,664

Current 585,915

30 days 111,250

60 days 37,083

90 days 7,417

Total Debtors 741,664

How can calculate the financial analysis of the liquidity risk based on the given information?

And how the risk treatment options will impact on future financial performance.