Liquidate

A A A

DEFINITION

1. To convert assets into cash or equivalents by selling them on the open market.

2. When an entity chooses or is forced by a legal judgment or contract to turn assets into a "liquid" form (cash).


INVESTOPEDIA EXPLAINS

1. An individual may choose to liquidate his or her possessions or investments to pay off creditors, convert assets to cash for spending or because the investments are not going to increase in value and the investor wants to re-allocate funds.

2. Businesses are best known to liquidate assets as a part of bankruptcy procedure, but the process can also be used by businesses to free up cash, even in the absence of financial hardship.



RELATED TERMS
  1. Liquidity Cushion

    A reserve fund for a company or individual made up of highly liquid investments. ...
  2. Side Pocket

    A type of account used in hedge funds to separate illiquid assets from other ...
  3. Cash

    Legal tender or coins that can be used in exchange goods, debt, or services. ...
  4. Cash And Cash Equivalents - CCE

    An item on the balance sheet that reports the value of a company's assets that ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable to repay outstanding ...
  6. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form of bankruptcy ...
  7. Chapter 7

    A bankruptcy proceeding in which a company stops all operations and goes completely ...
  8. Illiquid

    The state of a security or other asset that cannot easily be sold or exchanged ...
  9. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets are sold and ...
  10. Liquidity

    1. The degree to which an asset or security can be bought or sold in the market ...
Related Articles
  1. Reinvesting Capital Gains In Leveraged ...
    Mutual Funds & ETFs

    Reinvesting Capital Gains In Leveraged ...

  2. Get Through Divorce With Your Finances ...
    Budgeting

    Get Through Divorce With Your Finances ...

  3. Employee Stock Options (ESO)
    Options & Futures

    Employee Stock Options (ESO)

  4. The Great Inflation Of The 1970s
    Economics

    The Great Inflation Of The 1970s

  5. An Overview Of Corporate Bankruptcy
    Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

  6. What are the differences between chapter ...
    Entrepreneurship

    What are the differences between chapter ...

  7. Can I roll over a profit-sharing plan ...
    Options & Futures

    Can I roll over a profit-sharing plan ...

  8. Taking Advantage Of Corporate Decline
    Bonds & Fixed Income

    Taking Advantage Of Corporate Decline

  9. Active or Passive? How to Blend Aspects ...
    Trading Strategies

    Active or Passive? How to Blend Aspects ...

  10. Debt Consolidation: When It Helps, When ...
    Credit & Loans

    Debt Consolidation: When It Helps, When ...

comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center