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- Liquid assets ensure a company’s ability to meet its immediate financial obligations and operating expenses. In addition, the assets serve as the company’s protection from unforeseen adverse events, such as a recession or a sudden decline in demand for the company’s products or services.
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Liquid assets ensure a company’s ability to meet its immediate financial obligations and operating expenses. In addition, the assets serve as the company’s protection from unforeseen adverse events, such as a recession or a sudden decline in demand for the company’s products or services.
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...
- Claire Boyte-White
Jun 27, 2024 · Liquid assets are important because a company consistently needs cash to meet its short-term obligations. Without cash, a company can't pay its bills to vendors or wages to...
- 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.
Liquid assets are financial assets that can be quickly and easily converted into cash with little or no loss in value. These assets provide immediate access to funds, making them essential for covering short-term financial obligations or emergencies.
Jul 19, 2022 · Financial liquidity is the measurement of how quickly an asset can be converted to cash. Liquidity impacts companies, individuals, and markets.
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Dec 22, 2020 · Liquidity Explained. Assets and investments your company owns have financial value. And liquidity indicates how quickly you can access that money, if you need to. Assets range in their liquidity. For example, you may have equity in a building your company owns.
