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Jun 27, 2024 · A liquid asset is cash on hand or an asset that can be easily converted to cash. In terms of liquidity, cash is supreme since cash as legal tender is the ultimate goal.
Oct 14, 2024 · Cash on hand is considered to be a liquid asset because it can be readily accessed. The money in your checking account, savings account, or money market account is considered liquid...
- Steven Nickolas
- 2 min
Nov 11, 2024 · This includes cash on hand, highly liquid investments, and other assets that can be easily accessible in case of an emergency. The formula to calculate liquid assets is: Liquid Assets = Cash and Cash Equivalents + Marketable Securities. Read more: Liquid Assets Formula: A Comprehensive Guide With Example.
Jun 27, 2024 · Liquid assets include cash on hand, accounts receivable, checking and savings bank account balance, marketable securities, and cash equivalents. Current liabilities include accounts payable, short-term debt, accrued expenses, income taxes payable, and the current portions of long-term debt.
- Cash. Includes physical money (local and foreign currency) as well as the savings account and/or current account balances.
- Cash equivalents. Cash equivalents are investment securities with a maturity period not exceeding a year. Examples include treasury bills, treasury bonds, certificates of deposit, and money market funds.
- Marketable securities. Stocks, bonds, and exchange traded funds (ETFs) are examples of marketable securities with a high degree of liquidity. They can be sold easily and it usually takes just a few days to receive the cash from their sale.
- Accounts receivable. Money owed to a business by its customers for goods and services provided makes up accounts receivable. The liquidity of accounts receivable varies.
A liquid asset is cash on hand or an asset other than cash that can be quickly converted into cash at a reasonable price. In other words, a liquid asset can be quickly sold on the market without a significant loss of its value.
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Jul 20, 2024 · Current assets are a representation of assets including cash and objects that will be converted into liquid assets within 12 months. These assets can include: Cash and cash equivalents: The total amount of cash on hand. Cash equivalents refer to short-term, high-quality investments, including certificates of deposit (CDs) and commercial paper.
