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Jun 27, 2024 · Business assets are usually broken out through the quick and current ratio methods to analyze liquidity types and solvency. Examples of liquid assets may include cash, cash equivalents, money ...
- 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 18, 2024 · For example, if you have $10,000 in liquid assets and your monthly expenses total $2,000, your liquidity ratio is 5.0. Therefore, you can live off your cash reserves for roughly five months.
- Henry Blodget
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. Generally, liquid assets are traded on well-established markets with a large number of buyers and sellers.
Nov 11, 2024 · This includes cash on hand, highly liquid investments, and other assets that can be easily accessible in case of an emergency. The formula to calculate liquid assets is: Liquid Assets = Cash and Cash Equivalents + Marketable Securities. Read more: Liquid Assets Formula: A Comprehensive Guide With Example.
Jun 27, 2024 · Liquid assets differ from non-liquid assets, which are assets that are difficult and take time to convert into cash without incurring a substantial loss in value. Examples of illiquid assets include real estate, art pieces, jewelry, antiques, cars, private company interests and private equity, over-the-counter stocks, employee stock options, and some types of debt instruments and hedge funds.
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Oct 9, 2023 · Examples of Liquid Assets. Some examples of common liquid assets are: Savings accounts: Savings accounts are designed to accrue interest on the funds deposited by the account holders. Savings ...
