BANKING AFFAIRS

Detailed explanation-1: -Definition: Liquidity means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it. Description: Liquidity might be your emergency savings account or the cash lying with you that you can access in case of any unforeseen happening or any financial setback.

Detailed explanation-2: -Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while tangible items are less liquid. The two main types of liquidity include market liquidity and accounting liquidity.

Detailed explanation-3: -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.

Detailed explanation-4: -Liquidity is a company’s ability to convert assets to cash or acquire cash-through a loan or money in the bank-to pay its short-term obligations or liabilities. How much cash could your business access if you had to pay off what you owe today-and how fast could you get it?

Detailed explanation-5: -Liquidity is a way to measure your business’s ability to use current assets to cover current liabilities. If your business is liquid, you can quickly and easily convert assets into cash to use. Current assets include cash, accounts receivable, inventory, etc. Current liabilities are debts that you owe within a year.