what is liquidate

what is liquidate

1 year ago 38
Nature

Liquidate means to convert assets into cash or cash equivalents by selling them on the open market. The term can refer to the process of bringing a business to an end and distributing its assets to claimants, which occurs when a company becomes insolvent. Liquidation can also refer to the act of exiting a securities position. In finance and economics, liquidation is the process of selling off a companys inventory, typically at a big discount, to generate cash. In the accounting world, liquidation refers to the process of selling all of a company’s assets to generate cash to pay off creditors or anyone the company owes money to.

Examples of liquidation include selling assets to fulfill other investment or non-investment obligations, to reallocate funds, or to pay off debts and obligations in order to dissolve a company. Liquidation sales often occur as part of a bankruptcy filing, but not necessarily. If a company needs to liquidate its assets quickly, there are businesses that specialize in liquidation.

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