Likvide

Likvide is a term found in Danish and Norwegian financial vocabulary used to describe liquidity or liquid assets. It is commonly seen in phrases such as likvide midler, denoting funds that can be readily converted into cash to meet short-term obligations. In this sense, likvide assets include cash on hand, bank deposits, and marketable securities; assets that are difficult to sell quickly, such as certain real estate or specialized equipment, are considered illiquid.

The concept is central to liquidity management in businesses and financial institutions. Adequate liquidity enables a company to cover day-to-day expenses, service debt, and withstand financial stress. Institutions monitor liquidity through ratios and metrics such as the current ratio, quick ratio (acid-test), and, in banking, liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).

Etymology and usage: likvid stems from Latin liquidus via French liquide, and in Danish and Norwegian, the term has come to mean “readily convertible to cash” as well as “in a liquid state” in everyday use. The English-equivalent term is liquidity; “liquid” is the corresponding adjective.

See also: Liquidity, Cash equivalents, Current ratio, Quick ratio, LCR, NSFR.