Short-term liquidity is a measure of the ease with which you can convert your assets into cash. It’s an important factor to consider when deciding how to manage your finances, as it affects your ability to access funds when you need them most. Generally speaking, short-term liquidity is composed of both current liabilities, such as accounts payable and short-term loans, and current assets such as cash and marketable securities. A business’s short-term liquidity ratio is calculated by comparing its current liabilities to its current assets. The higher this ratio is, the easier it is for the business to pay off its short-term debt obligations.