Search Investopedia

Liquidate

Filed Under »
Dictionary Says

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 Says

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 Definitions

  • Liquidation

    1. When a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareholders. 2. Any transaction that offsets ...
    Read More »

  • Bankruptcy

    A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf ...
    Read More »

  • Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs and assets. It is generally filed by ...
    Read More »

    • Chapter 7

      A bankruptcy proceeding in which a company stops all operations and goes completely out of business. A trustee is appointed to liquidate (sell) the company's assets, and the money is ...
      Read More »

    • Cash And Cash Equivalents - CCE

      An item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.
      Read More »

    • Cash

      Legal tender or coins that can be used in exchange goods, debt, or services. Sometimes also including the value of assets that can be converted into cash immediately, as reported by a ...
      Read More »

    • Liquidity

      1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. ...
      Read More »

    • Illiquid

      The state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value. Illiquid assets also cannot be sold quickly because of a lack ...
      Read More »

    • Liquidity Cushion

      A reserve fund for a company or individual made up of highly liquid investments. A liquidity cushion relates to a business or individual holding an ample amount of cash, or other highly ...
      Read More »

    • Side Pocket

      A type of account used in hedge funds to separate illiquid assets from other more liquid investments. Once an investment enters a side pocket account, only the present participants in ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions