By Leanna Kelly Often, investors and companies will refer to their current liquidity. They’re typically talking about their available cash on-hand and the ability to quickly access funds. In accounting, investment liquidity is the ability for current assets to meet current liabilities, often by being converted to cash. It also refers to the amount of trading volume for a particular asset. As a general rule, liquidity is a good thing; however, illiquid investments aren’t inherently bad. The context for liquidity is often circumstantial.
Investors and companies alike need to be mindful of liquidity. If there’s too much capital locked up in illiquid investments, …read more
