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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
Jul 10, 2023 · Examples of liquid assets include cash, bank account balances, money market accounts, certificates of deposit, treasury bills, marketable securities, and foreign currency. Of course, this is not an exhaustive list, so let’s take a closer look at various examples of liquid assets. Physical cash. Basic bank accounts. Money market accounts.
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.
Jun 27, 2024 · A liquid asset is calculated by determining the total liquid assets, adding up the assets, then subtracting the total current liabilities including, short-term debt and obligations. The advantages of liquid assets include easy conversion to cash, financial flexibility, price safety and stability, peace of mind, and expanded investment opportunities.
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Examples of liquid assets include cash, money in savings or current accounts, marketable securities like stocks and bonds, government bonds, and treasury bills. These assets are easily accessible and can be quickly turned into cash without significant loss of value.
