Definition

Noun: * Assets in the form of cash or easily convertible into cash: "Liquid assets" are resources owned by an individual or company that can be quickly and easily converted into cash without a significant loss of value. They are a measure of financial flexibility and short-term stability.

Usage

The term "liquid assets" is used primarily in financial, business, and personal finance contexts to describe readily available wealth. It is often discussed in relation to liquidity ratios, emergency funds, and financial health.

Examples

• Noun:
  • The company's balance sheet shows strong liquid assets, including cash and marketable securities.
  • Before buying a house, you should ensure you have enough liquid assets to cover the down payment and closing costs.
  • Financial advisors recommend keeping three to six months' worth of expenses in liquid assets for emergencies.

Advanced Usage

• "Highly liquid assets": A phrase emphasizing the ease and speed of conversion to cash.
  • Treasury bills are considered highly liquid assets.
• Contrast with "illiquid assets": Assets that are not easily or quickly convertible to cash without a substantial discount (e.g., real estate, specialized equipment).
  • While he is wealthy on paper, most of his wealth is tied up in illiquid assets like property.

Variants and Related Words

• Liquidity (n): The state of being liquid; the degree to which an asset can be quickly bought or sold without affecting its price.
  • The fund provides investors with high liquidity.
• Liquidate (v): To convert assets into cash.
  • They had to liquidate some investments to pay the debt.

Synonyms

• Cash equivalents: Short-term, highly liquid investments.
• Ready money: Cash or assets immediately available for use.
• Current assets (in accounting): Assets expected to be converted to cash within one year, which include liquid assets.

Noun

1. assets in the form of cash (or easily convertible into cash)