Liquidation is the process of converting assets into cash to pay off debts or distribute to shareholders. It is typically used when a company or individual is unable to meet their financial obligations and must sell off their assets to settle their debts. This can involve selling physical assets such as property or inventory, as well as financial assets like stocks or bonds. The goal of liquidation is to wind down a business or individual’s financial affairs in an orderly and fair manner. It is often seen as a last resort when other options, such as restructuring or bankruptcy, have been exhausted. In some cases, liquidation can also refer to the dissolution of a company or the closure of a business.