#Liquidity101

(In 100 words):

1. Definition: Liquidity refers to how easily assets can be converted into cash without affecting their value.

2. High Liquidity: Cash, stocks, and government bonds are highly liquid.

3. Low Liquidity: Real estate, collectibles, and private equity take longer to sell.

4. Importance: High liquidity allows quick access to funds in emergencies.

5. Business Impact: Companies need liquidity to cover short-term expenses and avoid insolvency.

6. Measurement: Common liquidity ratios include the current ratio and quick ratio.

7. Investor View: Investors prefer liquid assets for flexibility and lower risk.

8. Balance: Maintaining both liquid and long-term assets is key.