A measure that examines a company's net liquid financial assets. The net liquid assets show how much of a company's liquid assets would be left if all current liabilities were paid off.
Calculated as:
Investopedia Says:
For example, if XYZ Inc. has $10 million in liquid assets and $50,000 in current liabilities. XYZ Inc. has $9,950,000 in net liquid assets.
Liquid assets would include cash (and equivalents), stocks, bonds and bank deposits. Common current liabilities would include bills from suppliers and insurance premiums.
Related Links:
Learn about the components of the statement of financial position and how they relate to each other. Reading The Balance Sheet
Learn what it means to do your homework on a company's performance and reporting practices before investing. Advanced Financial Statement Analysis
