#Liquidity101

1. Core Concept:

* Convertibility to Cash: The primary aspect of liquidity is how quickly an asset can be turned into spendable cash.

* Preservation of Value: A truly liquid asset can be converted to cash at or very close to its fair market value, without needing to be sold at a significant discount.

2. Types of Liquidity:

* Company Liquidity (or Accounting Liquidity): This refers to a company's ability to meet its short-term financial obligations (like bills, salaries, supplier payments) using its readily available assets. It's a key indicator of a company's financial health and stability.