What does liquidity mean in economics/business??

Answer 1

English teacher answer: "liquidity" means change into cash. A company has liquidity if an employee can use cash for business purposes or for investments.

However, it is a little more complicated in practice. (For instance, any company which can quickly and easily sell or trade an asset without outside approval is considered to have "liquidity". There are also uses for the term for exchanging stocks.) For the purpose of this Ask An Expert, I explained the meaning of the word "liquidity".