Liquidity, in law, is the ease with which an asset can be converted to cash. Real estate is considered an illiquid asset; it can take months to sell a plot of land. An interest in a privately owned company may be liquid or may not -- the question is very context specific. But a stock in a publicly owned and exchange traded company is very liquid -- it can be turned into cash by a call to one's broker. This is distinct from, although, closely related to, the sense that the word "liquidity" has among economists or in the world of finance. In those worlds it is a market not an asset as such that has liquidity, And the liquidity is in essence the volume of activity. It is a good thing that markets are liquid (in the finance sense), because it renders the assets involved liquid (in the lawyers' sense) and, all other things equal, one would rather have a liquid asset than an illiquid one. In discussions of corporate management and accounting, "liquidity" h...