liquid assets

Meaning

This term refers to cash on hand or assets (such as stocks or short-term bonds) that can be quickly and easily converted into cash with little to no loss in value. In business and personal finance, maintaining sufficient liquid assets is crucial for meeting short-term obligations and handling emergencies. The tone is highly professional and analytical.

Examples

• The company has over five million dollars in liquid assets to cover immediate expenses.

  The company has over five million dollars in liquid assets to cover immediate expenses.

• Before approving the loan, the bank needs to assess your total liquid assets.

  Before approving the loan, the bank needs to assess your total liquid assets.

• Real estate is a valuable investment, but it is not considered one of our liquid assets.

  Real estate is a valuable investment, but it is not considered one of our liquid assets.

• During a market downturn, holding a portion of your wealth in liquid assets is a safe strategy.

  During a market downturn, holding a portion of your wealth in liquid assets is a safe strategy.

• We need to convert some of our inventory into liquid assets to pay off our short-term debts.

  We need to convert some of our inventory into liquid assets to pay off our short-term debts.

Common Mistakes

• ✗ We need to sell our house because we need more liquidity assets.

  ✓ We need to sell our house because we need more liquid assets.

  Use the adjective 'liquid' to modify 'assets,' not the noun 'liquidity.'

• ✗ Cash is the most liquefied asset a business can hold.

  ✓ Cash is the most liquid asset a business can hold.

  'Liquefied' refers to physical solids turning into liquids (like liquefied natural gas). In financial contexts, always use 'liquid.'

Related Expressions

Practice

• The firm was forced to sell its property because it lacked enough ___ to pay its creditors.

  💡 Cash or resources easily converted to cash.

  Show answer

  liquid assets

• To prepare for an economic downturn, the board decided to increase the company's holdings in ___.

  💡 Cash and cash equivalents.

  Show answer

  liquid assets