Word
liquidity
Phoneticsliq·uid·i·ty
US/ɫɪˈkwɪdəti/
UK/lɪkwˈɪdɪti/
Definitions
01cash availability
n. the ability of a person or company to pay their bills on time because they have enough cash available.
n. the availability of liquid assets (cash or cash equivalents) to meet short-term financial obligations as they fall due.
“The small shop went out of business because it ran out of liquidity during the slow winter months.”
“The central bank intervened to provide emergency liquidity to the commercial banking sector, preventing a systemic collapse during the credit crunch.”
Technical · Academic
Usage
Often used in the context of 'liquidity crisis' or 'liquidity ratio'.
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02ease of selling
n. how easily you can sell something, like a house or a stock, for its full value without waiting a long time.
n. the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
“Gold has high liquidity because you can sell it almost anywhere in the world for cash very quickly.”
“Investors often demand a higher return for holding real estate because its lack of liquidity makes it difficult to exit a position rapidly.”
Technical · Academic
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03physical state
n. the physical quality of being a liquid rather than a solid or a gas.
n. the physical property or state of being fluid or liquid in form.
“The scientist studied the liquidity of the metal as it was heated to extreme temperatures.”
“The experiment measured the varying liquidity of different oil samples under high-pressure conditions to determine their suitability for deep-sea drilling.”
Technical · Formal
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Real-World Examples
“That included the Fed’s extensive use of its emergency lending powers to inject liquidity into the economy and its creation of special lending facilities to assist selected markets and institutions.” “Gold ETFs and mining stocks offer more liquidity, and when the price of gold rises, profit margins and stock prices can rise faster than the price of physical gold itself.” Etymology
From liquid + -ity, from Latin liquiditas.
Etymology adapted from Wiktionary, available under CC BY-SA 4.0.
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englishreference.com/q/liquidity