WordValeliquidity
how easily an asset can be converted into cash
In more detail
1. (noun) the quality of being easily converted to cash; how quickly and easily an asset can be turned into money
2. (noun) the amount of money or liquid assets available to a person or organization
Examples
- 1. The liquidity of stocks makes them attractive to investors who need quick access to their money.
- 2. The company faced a liquidity crisis and couldn't pay its bills on time.
How to use liquidity
Liquidity is used in both financial and everyday contexts to describe the availability of cash or how readily assets can be converted to cash. In finance and business, it often refers to market liquidity (how easily assets trade) or corporate liquidity (a company's cash position). It is more technical than casual, appearing frequently in business reports, financial analysis, and economic discussions.
Common phrases
- liquidity crisis
- liquidity problem
- liquidity constraints
- improve liquidity
- manage liquidity
- tight liquidity
Synonyms
fluidity · liquidity crisis · cash flow · available funds · working capital
Opposites
illiquidity · illiquidity
Word family
liquid · liquidate · liquidation · illiquid
A common mistake
Learners often confuse liquidity with solvency; liquidity is about having immediate cash available, while solvency is about the ability to meet all debts long-term.
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