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In financial economics, a liquidity crisis is an acute shortage of liquidity. [1] Liquidity may refer to market liquidity (the ease with which an asset can be converted into a liquid medium, e.g. cash), funding liquidity (the ease with which borrowers can obtain external funding), or accounting liquidity (the health of an institution's balance sheet measured in terms of its cash-like assets).
A going concern is an accounting term for a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period (the longer of the two).
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation or receivership following bankruptcy, which may result in the court creating a "liquidation trust"; or sometimes a court can mandate the appointment of a liquidator e.g. wind-up order in Australia) or voluntary (sometimes referred to as a shareholders ...
Loss of Assets When legal fees reach staggering highs, you may be forced to liquidate assets. “You can end up spending a lot later on to replace those assets,” said Erika Kullberg, a personal ...
Verify the situation: If you receive a notice of receivership or liquidation from your insurance provider, confirm the status of your insurance company by contacting your state’s department of ...
Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset, since it affects their ability to trade. [2] Manifestation of liquidity risk is very different from a drop of price to zero. In case of a drop of an asset's price to zero, the market is saying that the asset is worthless.
NEW YORK (Reuters) -FTX received court approval of its bankruptcy plan on Monday, which will allow it to fully repay customers using up to $16.5 billion in assets recovered since the once-leading ...
In a relatively illiquid market, an asset must be discounted in order to sell quickly. [1] [2] A liquid asset is an asset which can be converted into cash within a relatively short period of time, [3] or cash itself, which can be considered the most liquid asset because it can be exchanged for goods and services instantly at face value. [1]