Jurgen Klopp says Everton are a "proper challenge" to reigning Premier League champions Liverpool ahead of the first Merseyside derby of the season.
Everton hold a three-point lead at the top of the table after Carlo Ancelotti's side won their opening four league games and will aim to end their ten-year wait for a derby win.
Klopp expects a stern examination from Everton, who have not finished higher than seventh since 2013-14, as Liverpool look to bounce back from their 7-2 defeat by Aston Villa before the international break.
"They did some good business and Carlo is a sensational manager. It was clear if he has the time to build something and resources to build something, then that is what he will do and he has done.
"The team looks really, really good. I would like to say something different but it is not possible.
"Of course they are a proper challenge. A lot of teams made good business in this window and they will all improve. We know about that and that is why we have to be ready for each and every game."
- Liverpool's form: Stumble or hangover?
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Klopp insists despite the dominance both he and Liverpool have enjoyed over Everton in the past decade their long-standing unbeaten record is not something that plays a role in the mindset of both teams.
"Long may it continue but we never think about it before we played them, not once. It's the hardest work for us tomorrow and we will be ready for that."
The international break saw a number of players from across Europe test positive for coronavirus and Klopp was asked about the scheduling with concerns raised within the game of whether international matches should talk place amid the pandemic.
He said: "They all came back healthy. How fit? We've had one and half days time to get them match ready, that's how it is."
Liverpool will be without Naby Keita for the match at Goodison Park due to a fitness issue, but they have no other fresh injury concerns.
Sadio Mane and Thiago Alcantara, who tested positive for coronavirus either side of last month, are available for selection after they returned to training earlier this week.
Klopp: Villa defeat the wake-up call Liverpool needed
Klopp has admitted the shock 7-2 defeat at Villa before the international break was probably the wake-up call his side needed.
"The challenge in this situation is that you don't want the players to be affected or influenced in the next game. You want a self-confident team," Klopp said.
"You don't want a team that looks like it's got heads down, but on the other side you don't want to forget the game as well and the 7-2 result helps pretty much with that, in the sense we will not forget it.
"And I got that feeling more and more during the hours after the game that maybe after all the positive things that happened to us it needed a proper knock in the middle of our face to shake us through.
"I'm not 100 per cent sure about that but that is the way I take it and then it was OK because there is no other reason why 7-2 should be good.
"But if it was for that then it could have been the most important game of the season. So that is why we try to use it and we will see."
Liverpool's form: Stumble or hangover?
Liverpool will find themselves in an unusual position when they travel across Stanley Park to play Everton on Saturday lunchtime - facing a Premier League opponent higher than them in the table.
But having suffered an embarrassing 7-2 defeat to Aston Villa before the international break, Jurgen Klopp's side trail their Merseyside rivals by three points after the opening four games of their title defence, and with questions swirling around about their recent form.
So with the help of former Liverpool defender Stephen Warnock, we look at if that reverse in the Midlands was just a one-off that can happen to even the very best teams, or whether the champions should be concerned that an unwanted trend has set in at Anfield?
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