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Jun 27, 2024 · For the purposes of financial accounting, a company’s liquid assets are reported on its balance sheet as current assets. Key Takeaways. A liquid asset is an asset that can easily...
Jan 22, 2023 · In corporate finance, liquid assets are those that can be used to pay off debts in a hurry. The most common examples of liquid assets are cash – on-hand or deposited in a bank – and...
- Claire Boyte-White
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.
- 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.
Jul 7, 2024 · Liquid asset refers to a financial resource or asset that can be converted into liquid cash quickly with minimum value on its value. Liquid assets hold an economic value for an individual, corporation, or government.
Jun 30, 2022 · Definition. Sources. Liquid assets are assets that can be converted quickly to cash. Learn how these assets work, how to calculate them, and why they're important in financial analysis.
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Nov 11, 2024 · Liquid assets are essential to cover the business's day-to-day expenses such as rent, utilities, salaries, and supplier payments. Businesses can cover these expenses more easily with liquid assets, especially cash, rather than waiting on receivables or liquidating long-term investments (Illiquid Assets). Managing Unstable Cashflow.
