Of course! Here is the translation of the Liquidity 101 guide to English:

💧 Liquidity 101: The Basics

🔹 What is Liquidity?

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price.

High Liquidity = Can buy/sell easily (e.g., cash, stocks of large companies)

Low Liquidity = Difficult to trade (e.g., real estate, art pieces)

🔹 Types of Liquidity

Market Liquidity

Refers to the ease of buying and selling assets in the market.

Example: A market like the New York Stock Exchange has high liquidity due to the large number of buyers and sellers.

Accounting Liquidity

Measures a company's ability to meet its short-term obligations.

The most common ratios used:

Current Ratio = Current Assets / Current Liabilities

Quick Ratio = (Current Assets - Inventory) / Current Liabilities

🔹 Why is Liquidity Important?

For Investors: They prefer liquid assets to quickly adjust their portfolios.

For Companies: They need liquidity to pay bills and stay in the market.

For Markets: Liquid markets are more stable and efficient.