Net liquid assets

Net liquid assets,

Definition of Net liquid assets:

  1. The amount of net liquid assets is one of a few measures that gives a snapshot of the financial condition of a firm. Cash and marketable securities are ready to deploy, while accounts receivables could be turned into cash within a short period of time, though perhaps not completely as there is typically a small percentage of bad debt associated with aged receivables. Inventory does not qualify as a liquid asset because it cannot be readily sold without a significant discount.

  2. The amount of valued instruments that are easily converted to cash after operating expenses are deducted from total income.

  3. Net liquid assets are a measure of an immediate or near-term liquidity position of a firm, calculated as liquid assets less current liabilities. Liquid assets are cash, marketable securities, and accounts receivables that can be readily converted to cash at their approximate current value.

How to use Net liquid assets in a sentence?

  1. A net liquid asset position also demonstrates that a company can make new investments without having to take on financing.
  2. Having too many liquid assets, however, demonstrates an idle use of cash, whereby the money could be put to better use, such as other investments or paying out dividends.
  3. Liquid assets include cash, marketable securities, and accounts receivables. They are any assets that can be quickly converted into cash.
  4. Net liquid assets are a measure of the near-term liquidity position of a firm, calculated as liquid assets less current liabilities.
  5. Having a net liquid asset position signifies a company is in good health and is able to pay its short-term obligations, such as paying suppliers and paying down short-term debt.

Meaning of Net liquid assets & Net liquid assets Definition