In financial terms what is liquidation?
Answers:
In law, liquidation refers to the process by which the existence of a company is brought to an end, and the assets and property of the company are distributed. Liquidation can also be referred to as winding-up and/or dissolution, although dissolution technically refers to the last stage of the liquidation process.
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation) or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations can also be controlled by the creditors). It also means Winding up of the operations of the Company.
In finance, liquidation is also sometimes used as convenient shorthand for converting an asset to cash-.
A company who has gone out of business. Due to lack of funds. / money.
Liquidation means to sell any assets you may have for cash on hand.
In finance, liquidation means converting an asset to cash.
This is not to be confused with the legal term liquidation, which refers to the process by which the existence of a company is brought to an end, and the assets and property of the company are distributed.
to convert anything in cash
A company that has been forced out of business because itz liabilities exceed its assets.
therefore the liquidator will liquidate (sell) the assets to pay his bill and the Preferential creditors. ie. Vat Tax Bank ect.
Hello! Liquidation means the conversion of one asset (something of monetary value, either actual or perceived) into cash-money. That said, have a wonderful day!
Its basically bankruptcy.
to convert to cash is "liquidity", not "liquidation"! Liquidation is when the company is going out of business due to debt defaults and sells all its net assets for cash in an attempt to compensate the debt.
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