liquidity

/lɪˈkwɪdəti/

noun

  1. The ease with which an asset can be bought or sold, or converted into cash, without greatly changing its price.

    B2

    uncountableformal

    • "Cash is one of the most liquid assets."B1
    • "The company sold some investments to improve its liquidity."B2
    • "Low liquidity in the market can make it difficult to sell large quantities without affecting the price."C1
    • "High liquidity in the bond market means investors can sell their bonds quickly."C1

  2. The ability of a person or organization to pay its debts and other short-term costs when they are due.

    B2

    uncountableformal

    • "The business needs more liquidity to pay its bills."B1
    • "The bank has enough liquidity to meet its short-term obligations."B2
    • "A sudden loss of liquidity forced the company to seek emergency financing."C1
    • "The company's high liquidity allowed it to pay off its debts easily."B2

Common mistakes

  • The company has a liquidity.→The company has liquidity.

    Liquidity is normally an uncountable noun.

  • Liquidity means that a company is profitable.→Liquidity means that a company can access cash or pay its short-term debts.

    Liquidity concerns access to cash; profitability concerns earning more money than is spent.

Collocations

high liquiditylow liquidityliquidity riskliquidity crisisimprove liquidityprovide liquidityliquidity ratiomarket liquidity

Word family

liquidliquidateliquidation