Net Liquid Assets

The formula for net liquid assets is:

Net Liquid Assets = Cash + Marketable Securities - Current Liabilities

Note that current liabilities are liabilities due within the next 365 days.

For example, let's assume that Company XYZ has $1 million in cash on its balance sheet, $300,000 in marketable securities, and $2 million of current liabilities. Using the formula above, Company XYZ's net liquid assets are:

$1,000,000 + $300,000 - $2,000,000 = -$700,000

In this example, Company XYZ has negative liquid assets, meaning that if it was forced to pay off all of its current liabilities today, it would not be able to do so.