Glossary

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Liquidity

Liquidity is a measure of the extent to which a company can meet its payment obligations on time. The more liquid a company is, the more financial leeway it has to act at short notice (see Cash flow).

Liquidity is also the term used to describe the marketability of securities. Liquid securities are characterised by high turnover, low bid-ask spreads and a large free float.

See alsoLiquidity risk
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