liquidity

Language: en

🇺🇸 /lɪˈkwɪdətiː/

📖 Definitions

  1. 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

  1. The liquidity of the substance allowed it to flow easily through the narrow tube.

  2. The company maintained high liquidity to ensure it could cover its short-term debts.

  3. The central bank injected liquidity into the financial system to prevent a credit crunch.

  4. The stock exchange experienced a sudden drop in liquidity during the financial crisis.

  5. Analysts raised concerns about the firm's liquidity after its current ratio fell below one.

  6. The liquidity of the schedule allowed the team to accommodate last-minute changes.