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  1. 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 securities.

    • 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.
  2. 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.

  3. 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
  4. 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 marketable...

    • Claire Boyte-White
  5. Apr 29, 2024 · Published Apr 29, 2024. Definition of Liquid Assets. Liquid assets are assets that can quickly and easily be converted into cash without significantly affecting their value. This characteristic of liquidity means that these assets can be sold or exchanged in the market with minimal time and effort.

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  7. Jun 30, 2022 · Liquid assets, which are the current assets of the business, are easily and rapidly converted to cash without loss of any of their market value. The usual types of liquid assets on the balance sheet are cash, accounts receivable, marketable securities, and inventory.

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