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Liquid capital can also be called liquid assets. Because in the case of repaying debt these assets can be turned into cash. Liquid capital includes tangible assets with some sort of value attached and if sold off or exchanged in the place of debt would be considered liquidated.

For example, your owned a real estate company 'XYZ' you borrowed a loan at some point, but now you need to pay it off immediately maybe because you are selling off the compay. So you look at the your assets and decide to sell off one of your assets well before you up and sell you have to cosider depreciation or appreciation since prices change over time.

So basically in order to measure liquid capital you need to know the rate of depreciation or appreciation.

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13y ago

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