1

liquid

adjective liq·uid \ ˈli-kwəd \
Updated on: 6 Dec 2017

Definition of liquid

1 : flowing freely like water
  • liquid detergent
2 : having the properties of a liquid : being neither solid nor gaseous
3 a : shining and clear
  • large liquid eyes
b : being musical and free of harshness in sound
  • the liquid song of the robin
c : smooth and unconstrained in movement
  • the liquid grace of a ballerina
d : articulated without friction and capable of being prolonged like a vowel
  • a liquid consonant
4 a : consisting of or capable of ready conversion into cash
  • liquid assets
b : capable of covering current liabilities (see liability 2) quickly with current assets

liquidity

play \li-ˈkwi-də-tē\ noun

liquidly

play \ˈli-kwəd-lē\ adverb

liquidness

noun

Examples of liquid in a Sentence

  1. Water and milk are liquid substances.

  2. The medicine is available in liquid form.

  3. She had large liquid eyes.

  4. the liquid notes of a bird

  5. the liquid grace of the dancer's movements

Recent Examples of liquid from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'liquid.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of liquid

Middle English, from Middle French liquide, from Latin liquidus, from liquēre to be fluid; akin to Latin lixa water, lye, and perhaps to Old Irish fliuch damp

Other Chemical Engineering Terms


2

liquid

noun

Definition of liquid

1 : a liquid consonant
2 : a fluid (such as water) that has no independent shape but has a definite volume and does not expand indefinitely and that is only slightly compressible

Examples of liquid in a Sentence

  1. Water and milk are liquids.

  2. a bottle of green liquid

Recent Examples of liquid from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'liquid.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of liquid

Other Chemical Engineering Terms


Financial Definition of LIQUID

liquid

What It Is

Liquid refers to the ability to transfer hard assets to cash or the state of being in a position where one has sufficient cash on hand to accommodate any and all necessary financial obligations.

How It Works

Market liquidity is a financial phrase that describes the possibility of converting an asset to cash within a short period of time with minimal transaction costs while not affecting the price integrity of the asset itself.

Accounting liquidity is very similar but references the ability of a business to meet its ongoing obligations by having sufficient cash on hand to meet the demands of its creditors.

Bank liquidity refers to the ability of a bank or banks to meet the demands of its depositors. As the banking system is highly gicd, it does not have on hand all of the cash deposited in its system.  Rather, the bank has its capital invested or on loan elsewhere, which is how the bank generates its income. Called fractional-reserve banking, banks loan out money based on the amount of deposits they have. What they keep in the physical bank to meet the normal demands of depositors is called the reserve, which is only a fraction of what the bank lends out. Maintaining the reserve at optimal levels is referred to as bank liquidity. Without safeguards for liquidity in place, a "bank run" can incur, which any banking system wants to avoid at any cost.

Why It Matters

Any entity which needs to generate and use capital, whether it be a bank, a household, or a business, must have the proper balance between income producing assets and liquid assets such as cash which produce no income. Holding illiquid assets can be a problem when cash is quickly needed.  The consequences can be having to sell valuable assets at a time when the market is not liquid and income or value will be lost.


liquidity

What It Is

Liquidity is the ability to sell an investment at or near its value.

How It Works

Let’s say you take an old painting from the attic to the local filming of Antiques Roadshow. The expert says your painting is worth $50,000. Surprise!

That’s great news, except that it could take months to find a buyer, and the buyer may only want to pay $35,000 or $40,000. Your painting, while valuable, isn’t very liquid. That is, you can’t convert it to $50,000 very quickly or easily. Houses aren’t very liquid, either. They too can take months to sell, and buyers often don’t pay the sticker price.

Why It Matters

Liquidity is a factor of supply and demand for a security. But it is also affected by the size of the original issue and the time since the original issue -- the smaller the number of securities out there or the longer the securities have been out there, the less liquid they tend to be.

Most people consider the size of the bid/ask spread as indicative of a security's liquidity -- the larger the spread, the less liquid (and thus the riskier) the security is. For example, let’s assume you are watching Company XYZ stock. If the bid price is $50 and the ask price is $51.50, then the bid-ask spread is $1.50. This spread may be high or low depending on what the spread typically is for Company XYZ stock. An increasing spread denotes increasing liquidity risk, and vice versa. In the worst-case scenario, liquidity risk makes it possible that the investor could take a loss if he or she has to sell the investment quickly.

All investments have liquidity risk. This is important to understand, because liquidity risk can compound other problems for investors. For example, if the investor is unable to liquidate his or her position, this may keep him from meeting debt obligations (that is, the liquidity risk increases the investor's credit risk). Buy-and-hold investors face less liquidity risk because they are generally not interested in buying and selling securities quickly. This is particularly true for buy-and-hold bond investors, who are simply waiting for their bonds to mature and are not concerned with interim price movements.



LIQUID Defined for English Language Learners

liquid

adjective

Definition of liquid for English Language Learners

  • : capable of flowing freely like water : not a solid or a gas

  • : shining and clear

  • : clear, smooth, and pleasant in sound


liquid

noun

Definition of liquid for English Language Learners

  • : a substance that is able to flow freely


LIQUID Defined for Kids

1

liquid

adjective liq·uid \ ˈli-kwəd \

Definition of liquid for Students

1 : flowing freely like water
  • liquid detergent
2 : neither solid nor gaseous
3 : clear and smooth or shining
  • liquid eyes
4 : made up of or easily changed into cash
  • liquid investments

2

liquid

noun

Definition of liquid for Students

: a substance that flows freely like water

Medical Dictionary

1

liquid

adjective liq·uid \ ˈlik-wəd \

medical Definition of liquid

1 : flowing freely like water
2 : having the properties of a liquid : being neither solid nor gaseous

2

liquid

noun

medical Definition of liquid

: a fluid (as water) that has no independent shape but has a definite volume and does not expand indefinitely and that is only slightly compressible

Law Dictionary

liquid

adjective liq·uid

legal Definition of liquid

1 a : consisting of cash or capable of ready conversion into cash
  • liquid assets
b : capable of covering current liabilities out of current assets especially in a rapid manner
  • a liquid insurer
2 : of or relating to a security or commodity with enough shares or units outstanding to hinder significant price variation from large transactions


Seen and Heard

What made you want to look up liquid? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

of very fine texture or delicate form

Get Word of the Day daily email!

Test Your Vocabulary

Star Wars Words Quiz

  • cu-jedi-training
  • The bounty portion of bounty hunters (such as Boba Fett) comes from a Latin word meaning
How Strong Is Your Vocabulary?

Test your vocabulary with our 10-question quiz!

TAKE THE QUIZ
Syn City

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!