Liquidity is:
A)how quickly loans can be paid.
B)how easily an asset can be converted to cash.
C)how much cash a company has on its balance sheet.
D)how quickly customers pay.

Question

Quizplus · Accepted Answer

Liquidity refers to how easily an asset can be converted to cash. This is important because it determines how quickly and easily a company can meet its financial obligations. While the other options may play a role in liquidity, the best choice is B because it directly relates to the ability to convert assets to cash.

Liquidity Is