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Explore the multifaceted concept of liquidity . Find out its meaning, comprehend its various types, measures, and effective management strategies. Liquidity is a company’s ability to convert assets to cash quickly enough to pay short-term obligations without significant losses. Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: Market liquidity , the ease with which an asset can be sold Accounting liquidity , the ability to meet cash obligations when due Funding liquidity , the availability of credit to finance the purchase of financial asset Liquid capital, the amount of money that a firm holds Liquidity risk, the risk that an asset will have impaired market liquidity Learn what liquidity means in financial markets and accounting, and how to measure and rank different types of assets and companies. See examples of liquidity ratios and balance sheets, and how to improve liquidity .
