In financial markets, liquidity refers to how quickly an investment can be sold without adversely affecting its value. The more liquid the investment, the sooner it can be sold (and vice versa), and the easier it is to sell at a reasonable price or current market value. All other equities, more liquid assets trade at a premium and liquid assets trade at a discount. In accounting and financial analysis, a company’s liquidity is a measure of how easily it can meet its short-term financial obligations.
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