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What are liquid assets?

Aida Kopijn May 6, 2022 Updated on: July 3, 2025

Liquid assets are cash or assets that can be quickly converted into cash without losing value. They include cash on hand, checking account balances, and available funds in online payment processors like PayPal. In short, liquid assets are assets you can use immediately to pay your bills.

As a business owner, staying in control of your finances is essential. Liquid assets give you insight into your company’s ability to cover short-term obligations and maintain a healthy cash flow. In this article, we’ll define liquid assets, explain where they appear on your balance sheet, and show you how to manage them more effectively.

Table of contents:

What is the meaning of liquid assets?
Where do liquid assets appear on the balance sheet?
Why are liquid assets important for your business?
Manage your liquid assets with Payt
Frequently asked questions about liquid assets

What is the meaning of liquid assets?

The definition of liquid assets is simple: these are financial resources that are readily accessible and can be used to meet immediate financial obligations. Common liquid assets examples include:

Cash in hand
Balances in your business checking accounts
Available credit on your business credit card
Funds in online payment platforms like PayPal or Stripe

Liquid assets are the financial engine of your business. Without sufficient liquidity, you may struggle to meet obligations on time or take advantage of growth opportunities.

Where do liquid assets appear on the balance sheet?

You’ll find liquid assets under current assets on the balance sheet. They’re often listed last because of their high liquidity—they can be used immediately. These assets are part of the most accessible resources your business has to maintain financial stability.

A clear view of your liquid assets on the balance sheet helps you make smarter decisions about spending, investing, or borrowing.

Assets	Amount ($)	Liabilities & Equity	Amount ($)
Fixed Assets		Owner’s Equity
Office Building	250,000	Capital Contribution	200,000
Equipment & IT	35,000	Retained Earnings	50,000
Current Assets		Short-Term Liabilities
Inventory	8,000	Accounts Payable	10,000
Accounts Receivable	12,000	Taxes & Payroll Liabilities	7,500
Liquid Assets		Long-Term Liabilities
- Cash on hand	500	Business Loan	55,000
- Checking Account	15,000
- PayPal Balance	2,000
Total Assets	322,500	Total Liabilities & Equity	322,500

Why are liquid assets important for your business?

Liquid assets provide a real-time snapshot of your company’s financial health. Can you pay wages, vendors, and taxes on time? Do you have enough buffer for unexpected expenses?

If not, it could lead to late payments or missed growth opportunities. Having surplus liquid assets gives you the flexibility to invest or react quickly to market changes.

Manage your liquid assets with Payt

Payt helps you take control of your liquid assets by speeding up payments through automated accounts receivable workflows. The result? More working capital, less time chasing invoices.
With Payt, you benefit from:

Faster payments: Invoices are paid 30% to 50% faster
Time savings: Up to 80% less time spent on reminders and follow-ups
Full control: You decide the timing and tone of communications
Certified security: ISO 27001 data protection standard

Want to strengthen your financial position? Download our brochure or schedule a free demo. Join over 17,000 users that automate their credit management with Payt.

Frequently asked questions about liquid assets

Are stocks a liquid asset?

Yes, publicly traded stocks are generally considered liquid assets because they can usually be sold quickly at market value. However, the liquidity depends on market conditions.

What are considered liquid assets?

Liquid assets include cash, checking account balances, and any assets that can be quickly and easily converted to cash without significant loss in value. This covers funds in payment processors, money market accounts, and short-term government bonds.

By Aida Kopijn

Aida is an accounts receivable management expert at Payt, known for her precision and organisational passion. She ensures every process is perfectly managed and optimised.