What is 'Liquidity'?

Liquidity is the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Liquidity Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. Breaking it Down: Cash is considered the standard for liquidity, because it can most quickly and easily be converted into... Read More » Related to "Liquidity" Learn about Financial Liquidity Financial liquidity comes into play for companies, your personal finances, investing, and financial markets. But assets and investments have various levels. Read More » Solvency Ratios vs. Liquidity Ratios: What's the Difference? Solvency and liquidity are both terms that refer to an enterprise's state of financial health, but with some notable differences. Read More » What is liquidity risk? Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk. Read More » Related Definitions Current Assets Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted into cash within one year. Read More » Overall Liquidity Ratio Overall liquidity ratio is the measurement of a company's capacity to pay for its liabilities with its assets. Read More » Acid-Test Ratio The acid-test ratio is a strong indicator of whether a firm has sufficient short-term assets to cover its immediate liabilities. Read More » Quick Assets Quick assets are those owned by a company with a commercial or exchange value that can easily be converted into cash or that is already in a cash form. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy