Definition of liquid asset

The liquid asset is one that can be quickly transformed into money without this implying a loss of value.

For the economy, the liquid or current asset is the one that allows its transformation or exchange for money with a lower cost or the non-loss of value when making said transaction. It is said that an asset is more or less liquid or has a higher degree of liquidity the faster it can be converted into cash.

There are different types of assets, including current or current, which can be easily sold to the extent that it does not imply a negative cost. Liquid assets are goods that can be converted into money without delay or consumed in a normal cycle of operations. The liquidity value of an asset depends, in part, on its owner's expectations of its market value.

Another type of assets are fixed, which unlike liquids do not vary during a cycle of exploitation normal or fiscal year. These fixed assets They are classified as not very liquid, since they require time and cost to be exchanged for money and, thus, imply a constant value for the company that cannot be altered with

speed. A fixed asset could be, for example, a property property.
On the other hand, as we mentioned above, liquid assets do vary and allow the company rapid mobility and fluctuation as they are sold or exchanged in rather periodic operations. A liquid asset in a company is typically cash in the box, since it is used in all types of financial operations.

Basically the most liquid asset is money, since it is used in banking and financial operations on a daily basis and without requiring much time or restrictions for its fluctuation.

Topics in Liquid Assets