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, 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]

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References edit

  1. ^ a b Laing, Graham Allen (1919). An Introduction to Economics. pp. 306–309.