Definition of Liquid asset:
An asset that can be converted into cash in a short time, with little or no loss in value.
Liquid assets include items such as accounts receivable, demand and time deposits, gilt edged securities. In some countries, precious metals (usually gold and silver) are also considered liquid assets. Also called quick asset.
A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities. Both individuals and businesses can be concerned with tracking liquid assets as a portion of their net worth. For the purposes of financial accounting, a company’s liquid assets are reported on its balance sheet as current assets.
A liquid asset is cash on hand or an asset that can be easily converted to cash. In terms of liquidity, cash is king since cash as legal tender is the ultimate goal. Assets than can be converted to cash in a short time are similar to cash itself because the asset holder can quickly and easily get cash in a transaction exchange.
How to use Liquid asset in a sentence?
- A liquid asset is an asset that can easily be converted into cash within a short amount of time.
- Liquid assets generally tend to have liquid markets with high levels of demand and security.
- Business assets are usually broken out through the quick and current ratio methods to analyze liquidity types and solvency.
- I own a beautiful home, luxurious car, but I often consider refinancing because my easy access to any substantial liquid asset just does not exist.
- Businesses record liquid assets in the current assets portion of their balance sheet.
- Although a savings account does not generate much interest, it is a much more liquid asset than a house or painting.
- The liquid asset was needed for the firm to own because they needed to be able to have access to cash if needed.
Meaning of Liquid asset & Liquid asset Definition