LIQUIDATION Meaning and
Definition
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Liquidation is a term used in commerce and finance to describe the process of converting assets or goods into cash or cash equivalents. It typically involves the sale of assets or discontinuation of business operations in order to settle debts or pay off creditors.
In the context of business, liquidation refers to the winding up of a company or organization that is unable to meet its financial obligations. This usually occurs when a company is insolvent or bankrupt. Liquidation involves the sale of all the company's assets, and the proceeds are then used to pay off outstanding debts. Any remaining funds are distributed among shareholders or owners according to their respective ownership stakes.
There are various types of liquidation, including voluntary liquidation wherein a company willingly decides to cease operations and liquidate its assets, and compulsory liquidation where a company is forced to liquidate by a court order due to insolvency.
Liquidation is also common in financial markets when an investor or trader sells their investments, such as stocks or bonds, to convert them into cash. This can be done to realize profits or to cut losses in a declining market.
Overall, liquidation is the process by which assets or goods are sold or converted into cash to settle debts or dissolve a business entity. It plays a crucial role in resolving financial difficulties and facilitating the distribution of assets in an orderly manner.
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The act or process of diminishing or lessening; the act of adjusting and settling debts.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Top Common Misspellings for LIQUIDATION *
* The statistics data for these misspellings percentages are collected from over 15,411,110 spell check sessions on www.spellchecker.net from Jan 2010 - Jun 2012.
Other Common Misspellings for LIQUIDATION
Etymology of LIQUIDATION
The word "liquidation" comes from the Latin term "liquidare", meaning "to make liquid or clear". This verb is derived from the Latin word "liquidus", which translates to "fluid" or "liquid". The term was adopted into French as "liquidation", and later entered English in the early 19th century with the same meaning. In a financial context, "liquidation" refers to the process of converting assets into cash to settle debts or distribute funds among creditors.
Idioms with the word LIQUIDATION
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go into liquidation
The idiom "go into liquidation" refers to the process in which a business or company is forced to sell all its assets in order to pay off its debts, typically because it is bankrupt or insolvent. Essentially, it means that the business is shutting down and ceasing its operations.
Similar spelling words for LIQUIDATION
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