#Liquidity101

#Liquidity101

Liquidity refers to how easily assets can be converted into cash without significantly affecting their price. In finance, high liquidity means assets like stocks or money market instruments can be quickly bought or sold. Cash is the most liquid asset, while real estate or collectibles are less liquid. Businesses and investors value liquidity because it ensures they can meet short-term obligations and take advantage of opportunities. Poor liquidity can lead to financial stress or missed chances. Measuring liquidity involves tools like the current ratio or quick ratio. Understanding liquidity is essential for smart investing and sound financial management. #FinanceBasics #InvestSmart