Liquid Assets
Assets easily converted to cash with minimal loss of value, such as cash equivalents and marketable securities, providing financial flexibility and emergency funds.
Liquid Assets
Assets that can be quickly converted to cash with minimal loss of value, such as cash, marketable securities, and short-term investments.
For instance, a company with $100,000 in cash, $50,000 in Treasury bills, and $75,000 in publicly traded stocks has $225,000 in liquid assets that could be accessed quickly if needed for unexpected expenses or opportunities.
Liquid assets provide financial flexibility and a safety margin during economic downturns or cash flow interruptions. They generally earn lower returns than less liquid investments, creating a tradeoff between liquidity and profitability that management must balance based on business needs and risk tolerance.