Liquidity refers to a state where something is in liquid form, like water. It can also refer to having cash or access to cash. Liquidity means things are flowing.

Although liquidity refers to…surprise! being a liquid, it’s usually used in a financial sense. Financially, liquidity refers to having access to cash or things you can sell and turn into cash. In other words, you have good cash flow. Liquidity can also apply to any situation that is marked by fluidity or runniness. You hope your new swimming pool is in a state of liquidity, and that you have enough financial liquidity to pay for it!

Definitions of liquidity

n the state in which a substance exhibits a characteristic readiness to flow with little or no tendency to disperse and relatively high incompressibility

liquid, liquid state, liquidness
Type of:
state, state of matter
(chemistry) the three traditional states of matter are solids (fixed shape and volume) and liquids (fixed volume and shaped by the container) and gases (filling the container)

n being in cash or easily convertible to cash; debt paying ability

Type of:
exchangeability, fungibility, interchangeability, interchangeableness
the quality of being capable of exchange or interchange

n the property of flowing easily

fluidity, fluidness, liquidness, runniness
Type of:
a consistency of low viscosity

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