Liquidity

What is liquidity?

Liquidity Definition: Liquidity refers to how quickly an asset can be liquidated or converted into cash for selling. Cash is the most liquid asset, easily moved or transferred to invest or pay for goods and services.

Liquity refers to accounting liquidity or market liquidity, and items that are less tangible or difficult to convert into cash. Cash ratios are used to calculate and measure the degree of liquidity.

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