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What is Marketability Posted: 15 May 2011 09:51 AM PDT A measure of the ability of a security to be bought and sold. If there is an active marketplace for a security, it has good marketability. Marketability is similar to liquidity, except that liquidity implies that the value of the security is preserved, whereas marketability simply indicates that the security can be bought and sold easily.

What Does Liquidity Mean? Posted: 15 May 2011 09:33 AM PDT The degree of ease and certainty of value with which a security can be converted into cash. The ability of a business to meet its obligations as they come due; the more liquid a business is, the better able it is to meet short-term financial obligations. Liquidity ratios are measurements used to calculate the degree of a company's liquidity. Some common liquidity ratios and the formulas for calculating them are as follows: *Accounts receivable turnover = Total credit sales divided by average accounts receivable *Accounts payable turnover = Total credit purchases divided by average accounts payable *Inventory turnover = Total cost of sales divided by average inventory *Acid-test = Cash plus securities plus accounts receivable, divided by current liabilities *Current ratio = Current assets divided by current liabilities *Working capital = Current assets minus the sum of current liabilities

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