![]() ![]() Two of the most common are the quick ratio and the current ratio: This can help them make investment or spending decisions. When considering liquidity for businesses and organizations, analysts can use solvency and liquidity ratios to determine their ability to meet short- and long-term financial obligations. Cash, of course, also fits the bill, as it can be used by anyone at any time. That is, they're things like stocks, or other easily sold securities such as US Treasury bonds. The same goes for other assets like stocks or exchange-traded funds: Stocks can be easily traded or sold for cash since there's always an interested buyer.įinally, the vast majority of liquid assets also are the type most commonly owned by investors. And because banks are liable for the the safely securing your funds, they're also protected. The cash in it is considered a liquid asset because the process of getting it out is as easy as a trip to the ATM. Think about the cash you may have in a bank account, for example.
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