Asset Liquidity

Asset liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its value. Highly liquid assets, like cash or stocks, can be sold rapidly with little loss of value. Less liquid assets, such as real estate or specialized equipment, may take longer to sell and might require accepting a lower price. Liquidity is important because it determines how readily an individual or organization can meet financial needs or obligations using their assets. Essentially, it gauges the ease of turning assets into cash that can be used immediately.