noun · academic
liquidity
/lɪˈkwɪdɪti/li·QUID·i·ty
The ease with which assets can be converted into cash without significant loss of value.
Examples
“Banks must maintain sufficient liquidity to meet deposit withdrawals.”
“Lack of liquidity can cause a company to fail even if it is profitable on paper.”
“Investors favour assets with high liquidity during market turmoil.”
Band 8 sentence
“During the global crisis many firms were solvent but illiquid, forcing them to sell assets at a loss to meet immediate obligations.”
Collocations
- market liquidity
- liquidity crisis
Word family
Common mistakes
The company has no liquidity problem = The company has no cash problem.→The company has no liquidity problem.
liquidness→liquidity
Say it for a higher band
5cash→6cash flow→7+liquidity
Synonyms
cash availability
Easily confused
cash flow
“Positive cash flow allowed the startup to expand operations.”
Related words
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