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Liquidity Formula

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Liquidity refers to the ease with which an asset or security can be bought or sold in the market without significantly affecting its price. Check FAQs
LY=LA+AR+SSTP
LY - Liquidity?LA - Liquid Assets?AR - Accounts Receivable?S - Stock?STP - Short Term Payables?

Liquidity Example

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With units
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Here is how the Liquidity equation looks like with Values.

Here is how the Liquidity equation looks like with Units.

Here is how the Liquidity equation looks like.

3.1591Edit=2500Edit+1750Edit+2700Edit2200Edit
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HomeIcon Home » Category Financial » Category Banking » fx Liquidity

Liquidity Solution

Follow our step by step solution on how to calculate Liquidity?

FIRST Step Consider the formula
LY=LA+AR+SSTP
Next Step Substitute values of Variables
∴ LY=2500+1750+27002200
Next Step Prepare to Evaluate
∴ LY=2500+1750+27002200
Next Step Evaluate
∴LY=3.15909090909091
LAST Step Rounding Answer
∴LY=3.1591

Liquidity Formula Elements

Variables
Liquidity
Liquidity refers to the ease with which an asset or security can be bought or sold in the market without significantly affecting its price.
Symbol: LY
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find LiquidityOpen Variable
Liquid Assets
Liquid Assets refer to assets that can be easily converted into cash or are already in the form of cash.
Symbol: LA
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Liquid AssetsOpen Variable
Accounts Receivable
Accounts Receivable refers to the money owed to a business by its customers for goods or services that have been rendered but not yet paid.
Symbol: AR
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Accounts ReceivableOpen Variable
Stock
Stock also known as equity or shares, represents ownership in a corporation.
Symbol: S
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find StockOpen Variable
Short Term Payables
Short Term Payables refer to the obligations that a company owes to its creditors or suppliers that are expected to be settled within a relatively short period, typically within one year or less.
Symbol: STP
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Short Term PayablesOpen Variable

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How to Evaluate Liquidity?

Liquidity evaluator uses Liquidity = (Liquid Assets+Accounts Receivable+Stock)/Short Term Payables to evaluate the Liquidity, Liquidity measures the ease with which an asset can be converted into cash without causing a substantial change in its value. Liquidity is denoted by LY symbol.

How to evaluate Liquidity using this online evaluator? To use this online evaluator for Liquidity, enter Liquid Assets (LA), Accounts Receivable (AR), Stock (S) & Short Term Payables (STP) and hit the calculate button.

FAQs on Liquidity

What is the formula to find Liquidity?
The formula of Liquidity is expressed as Liquidity = (Liquid Assets+Accounts Receivable+Stock)/Short Term Payables. Here is an example- 3.159091 = (2500+1750+2700)/2200.
How to calculate Liquidity?
With Liquid Assets (LA), Accounts Receivable (AR), Stock (S) & Short Term Payables (STP) we can find Liquidity using the formula - Liquidity = (Liquid Assets+Accounts Receivable+Stock)/Short Term Payables.
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