Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: *

Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the ...

, the ease with which an asset can be sold *

Accounting liquidity In accounting, liquidity (or accounting liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio In mathematics, a ratio shows how many times one number contains an ...

, the ability to meet cash obligations when due *

Liquid capital Liquid capital or fluid capital is the part of a firm's assets that it holds as money. It includes cash balances, bank deposits, and money market investments. Since these assets provide little or no income to the firm, it will ordinarily seek to in ...

, the amount of money that a firm holds * Liquidity risk, the risk that an asset will have impaired market liquidity

See also