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Your inventory, accounts receivable, and stocks are examples of liquid assets — things you can quickly convert to hard cash. Liquidity, or your business’s ability to quickly convert assets into cash, is vital on multiple fronts.
Jun 27, 2024 · A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities. Both...
- 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.
Aug 6, 2021 · August 6, 2021. In financial accounting, inventory is categorised as a current asset and operating asset as every business expects to encash it within its fiscal year. Inventories are liquid assets and goods of value that a company keeps and plans to sell for a profit. It helps to fund current needs.
Jul 19, 2022 · Cash, public stock, inventory, and some receivables are considered more liquid as a company or individual can expect to convert these to cash in the short-term. Long-term fixed assets or...
- Jim Mueller
Jul 2, 2024 · Is Inventory a Liquid Asset? In many cases, inventory is not considered a liquid asset, because it may require a significant amount of time to find a buyer. Also, when a business is in a rush to sell its assets, potential buyers may demand a discount before they will accept delivery.
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Jun 27, 2024 · Examples of liquid assets include cash, inventory, accounts receivable, marketable securities, tax refunds, and cash alternatives. Cash is the most liquid asset in the world.