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An asset can include tangible and intangible things that have future economic value for the company, machinery, cash and investments are its examples. It is divided into two categories fixed assets and liquid assets. The assets which are in cash form or can be easily converted into cash are known as liquid assets. Liquid assets include stocks and cash. While the fixed assets cannot be easily converted into cash. These assets help in generating revenue in the long run. Machines are a good example of fixed assets.

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The main distinction between a liquid asset and other forms of assets is the ease at which the asset could be converted into cash(money).

  • Liquid assets are a set of property or investment which can be converted easily into cash.
  • They include raw cash(which is already in it's required form).
  • Fast selling and marketable securities which can be traded and converted into cash within a short time.
  • Asssets whose conversion time could be lengthy cannot be classified as being liquid, even if it's worth is huge.

Therefore, liquid assets differs from other forms of asset due to it's ease of conversion into cash.

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