I’ve been getting into finance, stonks and crypto lately and I love researching and learning. But one word I’ve never fully understood is “liquidity”.
What is it?
Does it mean cash?
Does it mean a bunch of stocks?
Is it a noun, an adjective?
What does it mean to provide liquidity?
What does it mean to liquidate?
What does it mean to be solvent/insolvent?
I’ve looked on many different articles and sources and I still can’t find a way of thinking about it that makes sense in all uses of the word
In: 7
Liquidity is cash, or assets that can quickly be converted into cash. Owning $15m worth of real estate won’t do a firm a lick of good if they don’t have the cash flow to maintain their buildings or meet payroll. Having liquidity means you can be more agile and have flexibility to adapt to changing conditions.
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