Liquid capital is an easily convertible asset, such as money. Liquid capital is the opposite of a long-term asset, such as real estate or a business.Know More
Also called fluid capital, liquid capital is cash, or something that can be converted into cash very quickly without a high impact to the amount of cash received. Examples of liquid capital possessed by most individuals include savings accounts, stocks and checking accounts, while liquid capital assets possessed by organizations and governments consist of stocks, money market instruments and government bonds.
For an asset to be considered liquid, it needs to have an established market that can absorb the sale of the asset without the price being negativity impacted. For example, if the selling of all of one person's or organization's apples would flood the market, resulting in the price of apples dropping noticeably, then apples cannot be considered a liquid asset.
The most liquid market in the world is the foreign exchange market because of the trillions of dollars exchanging hands every single day; this huge amount of material being exchanged means that one single individual cannot influence the market or its exchange rate.
Liquid capital is one-half of a person's or organization's net-worth; the other half being long-term assets and possessions.Learn more about Investing
A person can increase capital gains by selling particular assets at an amount greater than the purchase price, notes the Internal Revenue Service. These assets must be held for at least one year prior to being sold on the open market.Full Answer >
An international capital market is a financial system by which governments, companies and individuals borrow and invest money trans-nationally. It is comparable to a capital market, which enables government entities, companies and individuals to borrow and invest domestically. Both systems occur between those with excessive funds and those with deficient funds.Full Answer >
A bank can issue new stock or sell subordinated debt to increase capital ratio if the bank is publicly traded, according to William F. Hummel, chief scientist of Control Systems Laboratory. Alternatively, a bank can improve its capital ratio by reducing its assets, although this option can potentially affect the bank's profitability.Full Answer >
A real estate capital gain is the profit made when selling a piece of real estate, reports the IRS. It is calculated by subtracting the basis, or amount originally paid, from the amount for which the property is sold.Full Answer >