I look at the definition and I understand the idea and concept of liquidity: It's how much cash you can pay and cover more or less immediately. I have x dollars in stocks and savings which can be turned to cash practically immediately. But if I also have a credit line of y dollars and the bank is directly willing to lend me z dollars (because I have no debt and I have fixed income) then would that count as liquidity because in practice that will mean that I will be able to cover x + y + x dollars within hours or next banking day. Or is there some clear regulation that a net liquidity cannot be from a credit line or a loan? Does it matter for the entity asking me what is my liquid net worth, they will likely not care and will not even know as long as I can pay the amount I claim or is it in the word "net" understood that none of the cash is allowed to be borrowed?
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The "net" in "net worth" is your worth after subtracting off all debt.
So, no, you can't count available unused credit in your net worth — liquid or otherwise.
answered Jul 6, 2020 at 23:51
