Liquidity

Cash and assets easily converted to cash are liquid assets, and liquidity is the extent to which an individual or firm can produce cash when necessary. A high degree of liquidity implies that a company isn't immediately going to fail in the event of a downturn in its business or the economy. That means increased safety for investors, but it comes at a price: cash and cash-like assets usually produce the lowest returns. Thus, a company sitting on a large pot of cash suffers reduced profitability compared to a similar company with all its assets brought to bear on its profitable business activities.

 

 

Investing terms and definitions starting with
Numbers A B C D E F G H I J K L M N O P Q R S T U V W Q Y Z

 

 

 

Copyright 2018 turtlemeat.com