Liquidate

AAA

DEFINITION of 'Liquidate'

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 'Liquidate'

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. Chapter 11

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

    A bankruptcy proceeding in which a company stops all operations ...
  3. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  4. Liquidity

    1. The degree to which an asset or security can be bought or ...
  5. Illiquid

    The state of a security or other asset that cannot easily be ...
  6. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
RELATED FAQS
  1. What are the differences between chapter 7 and chapter 11 bankruptcy?

    Chapter 7 bankruptcy is sometimes also called liquidation bankruptcy. Firms experiencing this form of bankruptcy are past ... Read Full Answer >>
  2. Can I roll over a profit-sharing plan to an SEP IRA account without suffering any ...

    It depends. If the transaction is processed as a direct rollover to the SEP IRA, then no taxes will be withheld. Through ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Reinvesting Capital Gains In Leveraged Portfolios

    Don't get forced into action. Learn how to plan properly to avoid making rash decisions.
  2. Budgeting

    Get Through Divorce With Your Finances Intact

    Find out how to split your finances without coming up short.
  3. Options & Futures

    Employee Stock Options (ESO)

    Employee stock options are a form of equity compensation granted by companies to their employees and executives.
  4. Economics

    The Great Inflation Of The 1970s

    Political moves meant prevent unemployment served to do the opposite, creating one of the worst fiscal disasters of the century.
  5. Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.
  6. Bonds & Fixed Income

    Taking Advantage Of Corporate Decline

    A bankrupt company can provide great opportunities for savvy investors.
  7. Investing Basics

    Understanding the DuPont Analysis

    DuPont analysis measures assets at their gross book value, rather than at net book value, in order to produce a higher return on equity (ROE).
  8. Professionals

    How To Measure Returns On The Series 65 Exam

    An investor who is evaluating the performance of a portfolio manager must take into consideration the impact that any contributions or withdrawals made by the investor will have on the overall ...
  9. Stock Analysis

    How Citigroup Ensured That It's Too Big to Fail

    As a business, Citi has everything going for it. Scale, operational breadth...and the ear of key policymakers.
  10. Mutual Funds & ETFs

    Are These 2015's Most Promising Mutual Funds?

    For 2015, the mutual funds covered below are likely to offer more upside potential than the vast majority of mutual funds in existence.

You May Also Like

Hot Definitions
  1. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  3. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  4. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  5. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
  6. Currency Carry Trade

    A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase ...
Trading Center