Search results
Jan 22, 2023 · The most common examples of liquid assets are cash – on-hand or deposited in a bank – and marketable securities such as stocks and bonds.
- Claire Boyte-White
Jun 27, 2024 · The most liquid assets are cash and securities that can immediately be transacted for cash. Companies can also look to assets with a cash conversion expectation of one year or less as...
May 18, 2024 · Key Takeaways. Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while...
- 2 min
Jun 27, 2024 · A liquid asset is anything that can be transformed into cash quickly in a short amount of time and with no loss in value. Examples of liquid assets include cash, inventory, accounts receivable, marketable securities, tax refunds, and cash alternatives. Cash is the most liquid asset in the world.
- 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.
People also ask
What is the most liquid asset?
What are liquid assets?
Is a liquid asset a cash equivalent?
Which assets sit closest to cash on the liquidity scale?
Why do businesses need liquid assets?
What types of assets have different liquidity conversion timeframes?
Mar 14, 2024 · By definition cash is the most liquid asset an individual or business can possess. All other assets can be placed on a scale of liquidity in relation to cash. The diagram below shows a couple of examples, from cash, down to real estate as one of the most illiquid assets.