GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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38% - Moderately

Liquidity


Synonyms:cash out, convert to cash, sell off, solvency
Filed Under: financial-banking
Tags: banking
 

Definition of liquidity

liquidity
1. A measure of how quickly an entity can convert assets into money without taking a sizable loss. There are different types of liquidity. Quick liquidity refers to assets which can be quickly converted into cash.

Related Terms and Acronyms:

  • cash collateral   The proceeds of cash collected from the sale of liquid assets while in bankruptcy.
  • illiquid asset   An asset that cannot be sold easily or in a timely manner for its full value.
  • liquid assets   Cash and other property that can be converted quickly and easily into cash.
  • liquidation   To convert into cash.
  • non-liquid asset   A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.
  • overall liquidity ratio   A method of determining how easily and quickly a company can sell off assets to pay off its debts.
  • quick assets (QA)   Assets that can be liquefied quickly without a loss.
  • quick liquidity ratio   A metric used to find if a company has enough liquidity to make it's short term financial obligations.
  • receivership   A form of bankruptcy where a person is appointed to take control of a company and is responsible for recouping unpaid debts.
  • solvency   To be able to meet one's financial liabilities in the short or long term.

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