LIQUIDITY

  1. The degree or extent to which an investment portfolio can be bought or sold in the market swiftly without any loss in value. It is distinguished by a high level of trading activity.
  2. Capacity to convert an investment instrument quickly; also called marketability.
  3. Measure of the extent by which an individual or organization has enough amount of money to meet immediate obligations, or assets that can be quickly converted into cash for short-term arrears

There is no certain liquidity formula; however, it is frequently calculated by using some liquidity ratios.