Glossary Terms

Liquidity

Liquidity signifies the degree to which a company’s existing assets can be converted to cash to fulfill financial obligations. The faster an asset can be turned into cash, the more liquid it is considered.

Liquidity signifies the degree to which a company’s existing assets can be converted to cash to fulfill financial obligations. The faster an asset can be turned into cash, the more liquid it is considered.

Beyond cash, the most liquid assets a business can have are funds in the bank, stocks, and bonds. Other liquid business assets include inventory and equipment.