Liquidity

Definition

• A measure of how quickly an entity can convert assets into money without taking a sizable loss. There are different types of liquidity. Quick liquidity refers to assets which can be quickly converted into cash.

Synonyms
convert to cash, solvency, sell off, cash out

Related Terms and Acronyms

• Cash Collateral — Definition,
  • The proceeds of cash collected from the sale of liquid assets while in bankruptcy.
• Illiquid Asset — Definition,
  • An asset that cannot be sold easily or in a timely manner for its full value.
• Liquid Assets — Definition,
  • Cash and other property that can be converted quickly and easily into cash.
• Liquidation — Definition,
  • The practice of selling or redistributing some or all of a business's assets in order to repay debts or pay investors if the business becomes insolvent or is sold in full or in part.
  • To convert into cash.
  • To settle the outstanding debts by selling property.
• Non-liquid Asset — Definition,
  • A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.
• Overall Liquidity Ratio — Definition,
  • A method of determining how easily and quickly a company can sell off assets to pay off its debts.
• Quick Assets (QA) — Acronym,
  • Assets that can be liquefied quickly without a loss.
• Quick Liquidity Ratio — Definition,
  • A metric used to find if a company has enough liquidity to make it's short term financial obligations.
• Receivership — Definition,
  • A form of bankruptcy where a person is appointed to take control of a company and is responsible for recouping unpaid debts.
• Solvency — Definition,
  • To be able to meet one's financial liabilities in the short or long term.