How readily an asset can be turned into cash.
Examples:
Cash - The highest state of liquidity
Liquid - Can be turned into cash at immediately and at will for a pre-determined dollar amount.
Semi-Liquid - Can be turned into cash in less than one year, but the amount cannot always be determined.
Illiquid - Cannot be turned into cash within one year and the amount of cash received cannot easily be determined.
Unknown - The liquidity of this asset is not known.