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Jan 22, 2023 · A company's liquid asset total also impacts a number of key financial ratios. Companies use metrics such as the cash, current and quick ratio to assess how well the business manages its money ...
- Claire Boyte-White
Oct 14, 2024 · A liquid asset is either available cash or an instrument that can easily be converted to cash. Liquid assets are perceived as being essentially identical to cash because they don't lose value when ...
- Steven Nickolas
- 2 min
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. Both ...
- 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.
Highly liquid assets like cash or treasury bills offer lower returns than less liquid investments, like real estate or private equity. This is because liquid assets are generally lower-risk, and the higher the liquidity of an asset, the lower the potential for high returns.
Aug 22, 2024 · Equities may be sold on stock exchanges almost instantly, and publicly traded stocks are considered very liquid. You usually receive cash from the sale within a few days.
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Dec 22, 2020 · Least Liquid Assets. Noncurrent assets are the least liquid assets because it takes longer to sell them. They include equipment, buildings and trademarks. Measuring Financial Liquidity. The concept of liquidity requires a company to compare the current assets of the business to the current liabilities of the business.
