The condition of having enough money on hand to meet financial obligations without having to sell fixed assets, such as machinery or equipment.
Liquidity
1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity.
2. The ability to convert an asset to cash quickly.
Investopedia Commentary
1. It is safer to invest in liquid assets than illiquid ones because it is easier for you to get your money out of the investment.
2. Examples of assets that are easily converted into cash include blue chip and money market securities. Also known as "marketability".
Related Links
Money Market Tutorial
Getting To Know The Money Market
See also: Asset, Blue Chip, Cash, Illiquid, Liquidity Cushion, Liquidity Risk, Money Market, Short Squeeze, Volume
liquidity