Liquidity
Liquidity is a phenomenon that refers to a firm's cash and marketable securities position and to its ability to meet maturing obligations. A liquid asset is any asset that can be quickly sold and converted to cash at its “fair” value. Active markets provide liquidity.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Liquidity. Liquidity refers to a firm's cash and marketable securities position and to its ability to meet maturing obligations. A liquid asset is any asset that can be quickly sold and converted to cash at its “fair” value. Active markets provide liquidity.
According to Principles of Economics by Timothy Taylor (3rd edition),
- Liquidity. How easy it is to sell an asset when desired.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
