An increase in loans or accounts payable increases cash flow. A decrease in loans or accounts payable decreases cash flow. Keep in mind the policies, which can affect receivables, payables, inventory, and other accounts. For example, liberal credit policy and terms affects account receivables, which in turn affects cash flow. There is a difference between cash and liquidity.
Cash is generally the most liquid assets of the business.
However, liquidity relates to the ability to convert assets to cash. An analysis of liquidity and cash can be done by using ratios. Other ratios such as profit margins and debt to equity are important for assessing the overall health of the company. However, while ratios are helpful, they may be hard to analyze. Ratios are only averages.