Which of the following best describes liquidation?

Liquidation is a financial process that involves converting assets into cash or cash equivalents. This typically occurs when a company is unable to meet its financial obligations and must sell off its assets to pay creditors or settle debts. The fundamental goal during liquidation is to generate enough cash from the sale of assets to cover outstanding liabilities, making it a necessary step for businesses facing insolvency.

In the context of the other options, investing in new projects relates to growth and expansion strategies rather than the process of liquidation. Divesting from market shares pertains to selling equity positions in other companies but does not imply the need for immediate cash to cover debts like liquidation does. Holding onto valuable properties suggests a retention strategy that opposes the essence of liquidation, which is driven by the necessity of generating cash from the sale of assets. Therefore, the choice that best describes liquidation is the selling off of assets to cover debts.