Definition for : Liquidity - assets

Assets are regarded as liquid where, as part of the normal operating cycle, they will be monetized in the same year. Thus they comprise (unless the operating cycle is unusually long) Inventories and Trade receivables. Assets that regardless of their nature (head office, plant, etc.) are not intended for sale during the normal course of business are regarded as fixed and not liquid.

(See Chapter 4 Capital employed and invested capital of the Vernimmen)

To know more about it, look at what we have already written on this subject