liq·uid·i·ty /li-'kwi-də-tē/ n: the quality or state of being liquid

Merriam-Webster’s Dictionary of Law. . 1996.

The amount of cash available to a person or business; the ease with which a person or business can obtain cash.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.

How easily one's assets can be converted back into readily available cash or the ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes. Liquidity is an important characteristic of a good market.
The ease with which an asset can be converted to cash without a significant loss in value.
In the context of finance, the extent to which an asset can be readily bought or sold in the market without affecting its price. A market is said to be liquid if the instruments traded on that market can easily be bought or sold in large quantities with minimum or no loss of value.
In the context of a company's financial condition, the ability to meet obligations when they come due with minimum loss. Liquidity is managed by monitoring and projecting cash flows to maintain a balance between short-term assets and short-term liabilities.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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Look at other dictionaries:

  • Liquidity — Li*quid i*ty (l[i^]*kw[i^]d [i^]*t[y^]), n. [L. liquiditas, fr. liquidus liquid: cf. F. liquidit[ e].] The state or quality of being liquid. [1913 Webster] [1913 Webster] …   The Collaborative International Dictionary of English

  • liquidity — 1610s, quality of being liquid, from L.L. liquiditatem (nom. liquiditas), from L. liquidus (see LIQUID (Cf. liquid)). Meaning quality of being financially liquid is from 1897 …   Etymology dictionary

  • liquidity — ► NOUN Finance 1) the availability of liquid assets to a market or company. 2) liquid assets …   English terms dictionary

  • liquidity — [li kwid′i tē] n. 1. the quality or state of being liquid 2. Finance a) the ability of a business to meet obligations without disposing of its fixed assets b) the ability of a market to absorb buying and selling without producing undue price… …   English World dictionary

  • liquidity — A market which allows quick and efficient entry or exit at a price close to the last traded price. The ability to liquidate or establish a position quickly is due to a large number of traders willing to buy and sell. The CENTER ONLINE Futures… …   Financial and business terms

  • Liquidity — A market is liquid when it has a high level of trading activity, allowing buying and selling with minimum price disturbance. Also a market characterized by the ability to buy and sell with relative ease. The New York Times Financial Glossary * *… …   Financial and business terms

  • Liquidity — 1. The degree to which an asset or security can be bought or sold in the market without affecting the asset s price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid… …   Investment dictionary

  • liquidity — [[t]lɪkwɪ̱dɪti[/t]] N UNCOUNT: oft N n In finance, a company s liquidity is the amount of cash or liquid assets it has easily available. [TECHNICAL] The company maintains a high degree of liquidity. ...serious liquidity problems …   English dictionary

  • liquidity —    the ability to pay your debts as they fall due    Only euphemistic when you lack it:     Sir Jeremy came to me saying that he lacked liquidity... that s the delicate way these European aristocrats say in deep shit. (Deighton, 1993/2)    A… …   How not to say what you mean: A dictionary of euphemisms

  • liquidity — noun /lɪkˈwɪdəti/ a) The state or property of being liquid. Some stocks are traded so rarely that they lack liquidity. b) An assets property of being able to be sold without affecting its value; the degree to which it can be easily converted into …   Wiktionary

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