Liquid capital
Economic term
Liquid capital or fluid capital is the part of a firm's assets that it holds as money.[1] It includes cash balances, bank deposits, and money market investments. Since these assets provide little or no income to the firm in a low interest rate environment, it will ordinarily seek to invest them in activities that offer a higher return on investment, apply them to outstanding debts, or distribute them to the firm's owners.[1]
See also
- Circulating capital
- High quality liquid assets
- Fixed asset
- Liquidity
References
- ^ a b Laing, Graham Allen (1919). An Introduction to Economics. pp. 306–309.
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