US Business Law / Taxes

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Liquidity, Liquidation, and Liquidation Value

By Jean Murray, About.com

Liquidity is the ability of a business to turn its assets into cash. Liquidity is sometimes confused with the concept of "solvency." but the two concepts are not the same.

Liquidation is the process of selling off assets to obtain cash.

A Liquidation Value is the value of a business based on assets being sold at their market prices. It is usually the lowest value of a business.

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