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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...
- 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.
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.
Jul 18, 2024 · Liquid assets are assets that are easily and simply converted to cash. Examples of liquid assets include cash, bonds, and CDs. Assets that lack liquidity require time or effort to trade or sell...
- Henry Blodget
Jul 19, 2022 · A company can gauge its liquidity by calculating its current ratio, quick ratio, or operating cash flow ratio. Liquidity is important as it indicates whether there will be the short-term inability...
- Jim Mueller
The key characteristics of a liquid asset include its ease of conversion and ability to maintain value when sold. Liquidity, therefore, measures how quickly an asset can be turned into cash while retaining its total value. Cash: Cash is the most liquid asset of all, as it is readily available and doesn’t require conversion.
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Jul 10, 2023 · Liquid assets refer to cash and cash equivalents, marketable securities, and other current assets that can be converted into cash in a short period of time. The primary characteristics of liquid assets are marketability, convertibility, and short term liquidation.
