Meaning & Definition of word "Liquidation"

Liquidation

/ˌlɪk.wɪˈdeɪ.ʃən/

1. The process of selling off assets to pay creditors in order to settle debts.
- Example: The company's liquidation was necessary to settle its outstanding debts.
2. The conversion of assets into cash.
- Example: During the liquidation, all inventory items were sold at significantly reduced prices.
3. The act of closing a business and distributing its assets.
- Example: After years of losses, the owners opted for liquidation and held an auction to sell all their equipment.
4. The process of winding up a company’s financial affairs.
- Example: The liquidation of the corporation was managed by an appointed receiver.
5. In finance, the process of making a business or asset easily convertible into cash.
- Example: Investors prefer liquid assets since they can be quickly converted to cash during liquidation.

Late Latin liquidatio, from liquidare 'to make liquid'.

going into liquidation:

The process by which a company is closed and its assets sold off.

liquidation sale:

A sale of merchandise at reduced prices due to the closing of a business.

forced liquidation:

Liquidation that occurs due to legal obligations or creditor demands.

bankruptcy:

A legal status of a person or entity that cannot repay the debts it owes to creditors.

assets:

Items of value owned by a company or individual.

creditor:

A person or company to whom money is owed.

Meaning: Going bust

Example Sentence: After years of losses, the business is going bust and will have to liquidate.

Meaning: Clear out

Example Sentence: They're clearing out the store before liquidation.