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 bank balance. Stocks are not liquid assets, neither is property, although both contribute to net worth. Liquidation sales are a good example of this. The company (usually one that has gone out of business) is trying to convert their material assets to liquid assets, or property in the form of products to money they can use for other purposes
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