Liquid Assets

Definition: Liquid Assets are assets that can be converted to cash quickly with minimal loss of value. The most liquid are Cash and Cash Equivalents, followed …

Liquid Assets are assets that can be converted to cash quickly with minimal loss of value. The most liquid are Cash and Cash Equivalents, followed by Short-Term Investments (marketable securities) and Accounts Receivable. Inventory is generally not considered a liquid asset because converting it to cash requires first selling it, which takes time and may require discounting. Liquid Assets is the conceptual numerator of the Quick Ratio and the Defensive Interval Ratio (Liquid Assets / Daily Operating Expenses).