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Cash, money market instruments, and marketable securities
- 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 individuals and businesses can be concerned with tracking liquid assets as a portion of their net worth.
www.investopedia.com/terms/l/liquidasset.asp
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.
What is a Liquid Asset? 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.
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
Nov 11, 2024 · A well-managed balance of liquid assets improves a company's flexibility, resilience, and readiness for future expansion. Understand liquid assets, their importance for businesses, examples, and how to calculate them for financial stability and growth.
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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.
