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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
Apr 22, 2022 · Liquid assets include cash and anything that can be converted into cash quickly and easily. Learn how they compare with other assets and why they're important for...
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 demand and security....
Liquid assets can be easily converted into cash with little or no loss in value. These assets are important because they provide immediate access to funds without selling off larger, more complex investments that may take time to liquidate.
- 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.
Jan 16, 2024 · Liquid assets are the cornerstone of your financial stability. They’re the lifelines that you can quickly tap into when an unexpected expense crops up or if you find yourself between paychecks. To put it simply, these are assets that can be converted into cash swiftly and with minimal impact on their value.
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Feb 9, 2024 · Liquid assets are of fundamental importance in the financial world functioning as any kind of asset that can be sold without significant loss with a relatively short term. Maintenance of liquid assets within the portfolios is required by Investors, as well as businesses.
