liquidity
🇺🇸 /lɪˈkwɪdətiː/
📖 Definitions
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noun
The quality or state of being liquid; the condition of being fluid rather than solid.; The degree to which an asset or security can be quickly bought or sold in the market without significantly affecting its price; the availability of liquid assets to meet financial obligations.; The total amount of liquid assets (cash or assets easily convertible to cash) held by an individual, company, or financial system.; The ease with which a market or exchange allows the buying and selling of assets, characterized by high trading volume and narrow bid-ask spreads.; The ability of a business to meet its current obligations as they fall due, often measured by ratios such as the current ratio or quick ratio.; The state of being fluid or flowing, as opposed to being rigid or fixed; flexibility or adaptability in form or arrangement.
🔗 Details
Word forms
uncountable
Collocations
liquidity crisisliquidity riskmarket liquidityliquidity ratioliquidity trapprovide liquidityliquidity shortage
Derivatives
liquidliquidateliquidationliquidatorilliquidilliquidity
Synonyms
fluidityconvertibilitycash availabilitymarketability
Antonyms
illiquidityinsolvency
Commonly confused
solvency
EN: 'Solvency' refers to the ability to meet long-term financial obligations, while 'liquidity' refers to the ease of converting assets into cash or meeting short-term obligations.
fluidity
EN: 'Fluidity' is a broader term for the quality of flowing easily (physical or metaphorical), while 'liquidity' is specifically used in financial and economic contexts.
Spelling tips
EN: Note the spelling: 'liquid' + '-ity' = 'liquidity'. Do not confuse with 'liquidity' vs. 'liquidness' (the latter is rare and non-standard).
💬 Examples
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The liquidity of the substance allowed it to flow easily through the narrow tube.
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The company maintained high liquidity to ensure it could cover its short-term debts.
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The central bank injected liquidity into the financial system to prevent a credit crunch.
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The stock exchange experienced a sudden drop in liquidity during the financial crisis.
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Analysts raised concerns about the firm's liquidity after its current ratio fell below one.
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The liquidity of the schedule allowed the team to accommodate last-minute changes.