What are Liquid Assets?
Liquid assets are among the most basic form of financial resources used by consumers, suppliers, and investors. Essentially, a liquid asset is cash or any type of negotiable asset that can be converted quickly and easily into cash. In many instances, financial experts choose to classify liquid assets as any asset that can be converted into cash within a period of twenty days. Currency and coin are the two most obvious forms of liquid assets. Immediately recognized as legal tender for purchases and to settle outstanding debts, currency remains the single most common of all liquid assets that are used on a consistent basis by retail customers. The circulation of currency and coins are controlled by the financial arm of the country in question, often a treasury or revenue department of the central government. Along with currency, there are several other common examples of liquid assets that are used both in business and in the private sector. Money that is deposited into a savings or chec
Equity, adjusted gross income, stocks, bonds, current ratio, operating cash flow, assets, liabilities, net worth — it’s easy to get lost in the jungle of financial terms out there when you’re trying to manage finances. Whatever happened to just measuring income and expenses? Well, when you ask yourself “how much am I worth?” it’s not just a question of how much money you have in your wallet, or even your bank account, at that moment. It turns out that, depending on how and when you invest, spend or save your money, your worth varies. Liquid assets make up just one special category of your worth. Understanding it will help you get a better idea of your own financial situation.
