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A) Liquid assets generally earn higher rates of return than fixed assets. B) If you can sell an asset next year at a price equal to its actual value, the asset is highly liquid. C) Liquid assets are defined as those assets obtained within the past year.
Study with Quizlet and memorize flashcards containing terms like Cash is the only kind of liquid asset. True False, Cash management helps in personal financial planning. True False, Extremely low interest rates favor investors and boost the incentive to save True False and more.
Liquid assets allow you to cover unplanned expenses without having to interrupt your long-term investments or liquidate any tangible assets.
- Examples of Liquid Assets
- Balance Sheet Treatment
- Importance of Liquid Assets
- Additional Resources
CashCash equivalents (checking account, savings account, money market account)Similar to other assets, liquid assets are reported on the balance sheetof a company. Assets are listed on the balance sheet in order of liquidity, with the most liquid types listed at the top of the balance sheet and the least liquid listed at the bottom. Although there is no direct measure of the liquidity of each asset, businesses and market ana...
Liquidity is one of the key factors that determine success in the world of business. Liquid assets ensure a company’s ability to meet its immediate financial obligations and operating expenses. In addition, the assets serve as the company’s protection fromunforeseen adverse events, such as a recession or a sudden decline in demand for the company’s...
CFI offers the Financial Modeling & Valuation Analyst (FMVA)®certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following CFI resources will be helpful: 1. Capital Structure 2. Current Assets 3. Idle Cash 4. Liquidity Event 5. See all accounting resources 6. See all capit...
Jun 27, 2024 · A liquid asset is an asset that can easily be converted into cash within a short amount of time. Liquid assets generally tend to have liquid markets with high levels of...
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Oct 9, 2023 · Liquid assets are holdings you can readily convert to cash without significant loss of time or value. They play a crucial role in financial stability by providing a quick source of funds in...