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Jan 22, 2023 · An asset's liquidity is a function of how easily it can be converted into cash. In corporate finance, liquid assets are those that can be used to pay off debts in a hurry. The most common...
- Claire Boyte-White
Jun 27, 2024 · Liquid assets are important because a company consistently needs cash to meet its short-term obligations. Without cash, a company can't pay its bills to vendors or wages to...
- 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.
Apr 22, 2022 · Liquid assets refer to assets that can be quickly into cash. Learn more about which assets are most liquid and how liquid assets compare to other asset types.
Liquid assets are essential for both personal and business financial health. For individuals, having enough liquid assets ensures they can cover short-term needs, such as bills, unexpected expenses, or even emergencies like medical situations.
Jul 30, 2024 · Liquidity describes your ability to exchange an asset for cash. The easier it is to convert an asset into cash, the more liquid it is. And cash is generally considered the most liquid asset.
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Oct 28, 2024 · •. What are liquid assets? •. Types of liquid assets: cash and non-cash. •. What are non-liquid assets? •. Why are liquid assets important? •. What are liquidity ratios? •. Where should you keep your liquid assets? Liquidity indicates how easily you can access and move your money.