ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The asset can be easily traded for water.
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The asset can be easily used or converted into cash.
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The asset can be a solid or a gas depending on the temperature
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The asset takes a long time to be converted into cash.
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Detailed explanation-1: -Share. Liquidity definition. 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-2: -Financial liquidity refers to how easily assets can be converted to ready cash without affecting its market price. Assets like stocks and bonds are very liquid and can be converted into cash within days.
Detailed explanation-3: -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.
Detailed explanation-4: -Liquidity means that the items that can convert to cash show up as cash on the balance sheet. Asset accounts are listed in order of their liquidity. Book value per share of stock is of greater concern to the financial manager than market value per share of stock.
Detailed explanation-5: -A liquid asset is a type of asset that can be rapidly converted into cash while keeping its market value. There are other factors that make assets more or less liquid, including: How established the market is. How easily ownership is transferred. How long it takes for the assets to be sold (liquidated)