<PAGE>
Dreyfus
Liquid
Assets, Inc.
Annual Report
December 31, 1997
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Liquid Assets, Inc. for
the 12-month reporting period ended December 31, 1997. Your Fund produced a
yield of 4.93% and, after taking into account the effect of compounding, the
effective yield was 5.04%.*
ECONOMIC REVIEW
In 1997, the U.S. economy put in its best growth performance of this business
cycle to date. In tandem, the labor market tightened markedly, marginally
boosting wage inflation towards year end. Yet price inflation decelerated and
bond yields fell. Although corporate profit growth was robust for much of the
year, strains began to appear in the second half in some sectors. The Federal
Reserve Board (the "Fed") tightened credit early in the year, then subsequently
stayed on hold, torn between strong economic reports at home and worsening
financial crises overseas. While the problems overseas may slow the U.S. economy
somewhat in 1998, incoming evidence indicates little adverse impact on economic
activity to date.
Real Gross Domestic Product (GDP) grew 3.8% in 1997, its best annual growth
since 1988. Almost all the major sectors contributed to growth. Households
enjoyed rising real incomes as wage increases outpaced price inflation. Moderate
interest rates buoyed housing demand. Tightening factory capacity boosted
capital spending, and until late in the year, steady foreign growth kept exports
robust. That many of these sectors grew simultaneously in a late phase of the
business cycle was unusual. The year 1997 also saw a dramatic narrowing of the
Federal budget deficit. It is likely that the associated drop in Federal
borrowing boosted the supply of credit available to the private sector.
As mentioned, overall corporate profit growth rebounded in 1997, after
slowing in 1996. Profits from domestic sources generally did well. However,
profits from international sources began to show strains in the second half,
impacted by the rising dollar and by financial stresses overseas. More recently,
profits at some companies have been slowed by price weakness.
Economic data this winter show the economy still quite strong although some
leading statistics have begun to signal somewhat slower economic growth for
1998. First, recently slowing export orders and rising import orders imply a
widening trade deficit. Second, the number of announced layoffs has begun to
rise, indicating some future easing of labor market pressures. Once these
leading indicators actually show up in a slowing of the economy, market
expectations may shift to anticipate the possibility of a move by the Fed to
ease credit. At the start of 1998, there was uncertainty about both the severity
of Asian stresses and their impact on the U.S. economy.
MONEY MARKET OVERVIEW
The financial turmoil in Asia that started affecting security markets last
fall did not have much effect as yet on the money market before the close of
1997. However, shortly after year-end, interest rates began declining. Yet for
much of 1997, money market rates stayed within a narrow range.
Last March, when the Fed raised short-term rates by a quarter point, the
money market responded with a brief spurt in yields. As the year went on, the
chief influences on rates continued to be the outlook for inflation in the U.S.,
which was benign, and prospects for corporate profits, which continued favorable
for most of the year. In addition, the customary year-end refinancings sent
interest rates up for a while.
Indeed, until the Asian problems began weakening equity prices, the money
market appeared to be expecting a possible Fed move to raise interest rates.
Late in 1997 and especially in early 1998, the picture changed. Lately, the
market's expectations have focused more on a possible move by the Fed to reduce
interest rates. The reasoning is that such an action would be a preemptive
strike against an economic trend that hasn't been mentioned for years --
potential deflation.
<PAGE>
PORTFOLIO FOCUS
Against this backdrop, we have kept the average maturity of the portfolio
slightly longer than the industry average. This provided the Fund with liquidity
while seeking improved yields without assuming undue market risks. We believe
this strategy has been in the interests of our shareholders. The currently
volatile environment requires flexibility on our part as managers. Of course, we
will make adjustments to the portfolio as required by the dynamics of the
market.
Sincerely,
/s/ Patricia A. Larkin
Patricia A. Larkin
Senior Portfolio Manager
January 20, 1998
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested daily.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1997
Principal
Negotiable Bank Certificates of Deposit--6.1% Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
Bankers Trust Co.
5.82%-5.85%, 1/8/98-1/9/98.................................................. $105,000,000 $ 104,998,197
Crestar Bank
5.74%, 2/25/98-3/16/98...................................................... 150,000,000 150,001,786
Old Kent Bank and Trust
5.66%, 7/7/98(a)............................................................ 25,000,000 25,000,000
--------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $279,999,983)......................................................... $ 279,999,983
==============
Commercial Paper--58.4%
- -------------------------------------------------------------------------------
AES Shady Point Inc.
5.70%-5.71%, 1/12/98-1/22/98(b)............................................. $102,883,000 $ 102,581,162
Abbey National North America
5.80%-5.81%, 3/6/98-3/10/98................................................. 165,000,000 163,281,371
BBL North America Inc.
5.69%, 3/17/98.............................................................. 75,000,000 74,135,937
BHF Finance (DE) Inc.
5.70%, 1/12/98.............................................................. 30,000,000 29,949,217
Bankers Trust Co. New York Corp.
5.75%, 4/16/98.............................................................. 20,000,000 19,673,917
Bear Stearns Companies Inc.
5.74%-5.81%, 3/2/98-3/20/98................................................. 120,000,000 118,823,000
Den Danske Corp. Inc.
5.69%-5.82%, 2/9/98-6/29/98................................................. 150,000,000 147,438,788
Finova Capital Corp.
5.70%, 1/26/98.............................................................. 25,000,000 24,903,299
Ford Motor Credit Corp.
5.82%, 3/13/98.............................................................. 150,000,000 148,349,250
General Electric Capital Corp.
5.67%-5.70%, 2/11/98-2/27/98................................................ 180,000,000 178,790,434
General Electric Capital Services, Inc.
5.74%-5.81%, 4/29/98-9/29/98................................................ 190,000,000 185,038,736
General Motors Acceptance Corp.
5.72%-5.86%, 1/13/98-8/18/98................................................ 210,000,000 206,207,500
Generale Bank Inc.
5.69%, 2/13/98.............................................................. 75,000,000 74,504,604
Goldman Sachs Group L.P.
5.75%-5.84%, 5/8/98-8/28/98................................................. 210,000,000 204,987,279
HSBC Americas, Inc.
5.75%, 1/14/98.............................................................. 20,000,000 19,959,628
International Nederlanden (U.S.) Funding Corp.
5.83%, 6/3/98............................................................... 75,000,000 73,195,875
Lehman Brothers Holdings, Inc.
5.75%-5.94%, 1/16/98-4/24/98................................................ 155,000,000 153,601,108
Merrill Lynch & Co., Inc.
5.72%-5.79%, 1/12/98-6/12/98................................................ 130,000,000 128,997,222
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Commercial Paper (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
Mitsubishi Motors Credit of America Inc.
5.70%, 1/20/98(b)........................................................... $ 14,050,000 $ 14,008,400
Salomon Inc.
5.85%-5.87%, 2/2/98-3/17/98................................................. 55,000,000 54,551,658
Sears Roebuck Acceptance Corp.
5.70%-5.88%, 1/22/98-2/25/98................................................ 200,000,000 198,659,014
Smith Barney Holdings
5.70%, 2/17/98.............................................................. 40,000,000 39,707,033
Societe Generale North America, Inc.
5.67%, 1/29/98.............................................................. 50,000,000 49,782,611
Sumitomo Corp. of America
5.76%, 3/17/98.............................................................. 14,000,000 13,836,667
Svenska Handelsbanken Inc.
5.69%-5.75%, 3/16/98-4/16/98................................................ 94,400,000 92,984,310
UBS Finance (DE) Inc.
6.75%, 1/2/98............................................................... 150,000,000 149,971,875
--------------
TOTAL COMMERCIAL PAPER
(cost $2,667,919,895)....................................................... $2,667,919,895
==============
Corporate Notes--21.3%
- -------------------------------------------------------------------------------
Bear Stearns Companies, Inc.
5.67%-5.83%, 1/13/98-7/9/98(a).............................................. $ 95,000,000 $ 95,000,000
Heller Financial Inc.
5.70%-5.80%, 4/15/98-11/6/98(a)............................................. 140,000,000 140,000,000
IBM International Finance N.V.
5.75%, 1/28/98.............................................................. 25,000,000 24,997,911
Key Bank N.A.
5.67%, 2/18/98(a).......................................................... 50,000,000 49,996,821
Lehman Brothers Holdings, Inc.
5.76%, 9/25/98.............................................................. 30,000,000 30,187,927
5.80%, 1/13/99(a)........................................................... 25,000,000 25,000,000
Merrill Lynch & Co., Inc.
5.72%, 3/26/98.............................................................. 25,000,000 25,000,000
5.67%, 8/11/98-9/9/98(a).................................................... 75,000,000 75,000,000
PHH Corp.
5.67%, 10/15/98(a).......................................................... 115,000,000 114,964,707
PNC Bank, N.A.
5.68%, 2/18/98-4/24/98(a)................................................... 210,000,000 209,981,943
Paine Webber Group Inc.
6.09%, 10/30/98............................................................. 30,000,000 30,000,000
Salomon Inc.
5.60%-5.65%, 6/1/98-7/20/98(a).............................................. 150,000,000 150,121,076
--------------
TOTAL CORPORATE NOTES
(cost $970,250,385)......................................................... $ 970,250,385
==============
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
Principal
Short-Term Bank Notes--9.1% Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
Bankers Trust New York Corp.
5.88%, 10/5/98.............................................................. $ 94,000,000 $ 93,972,704
BankBoston
6.00%, 3/23/98.............................................................. 45,000,000 45,000,000
Comerica Bank
5.67%-5.71%, 4/17/98-7/13/98(a)............................................. 150,000,000 149,975,076
LaSalle National Bank
5.70%-5.80%, 2/9/98-12/28/98................................................ 75,000,000 75,000,000
Morgan Guaranty Trust Co.
5.83%, 8/31/98.............................................................. 50,000,000 50,023,595
--------------
TOTAL SHORT-TERM BANK NOTES
(cost $413,971,375)......................................................... $ 413,971,375
==============
U.S. Treasury Bills--.2%
- -------------------------------------------------------------------------------
5.31%, 10/15/98
(cost $7,677,922)........................................................... $ 8,000,000 $ 7,677,922
==============
U.S. Government Agencies--1.1%
- -------------------------------------------------------------------------------
Federal Home Loan Banks, Floating Rate Note
5.65%, 4/27/98(a)
(cost $50,023,878).......................................................... $ 50,000,000 $ 50,023,878
==============
Time Deposits--2.7%
- -------------------------------------------------------------------------------
Republic National Bank of New York (London)
5.00%, 1/2/98
(cost $124,172,000)......................................................... $124,172,000 $ 124,172,000
==============
Repurchase Agreements--1.6%
- -------------------------------------------------------------------------------
SBC Warbug Dillon Read
6.55%, dated 12/31/97, due 1/2/98 in the amount of
$75,027,292 (fully collateralized by $77,943,000 U.S.
Treasury Bills due 5/7/98, value $76,513,179)
(cost $75,000,000).......................................................... $ 75,000,000 $ 75,000,000
==============
TOTAL INVESTMENTS
(cost $4,589,015,438)............................................... 100.5% $4,589,015,438
====== ==============
LIABILITIES, LESS CASH AND RECEIVABLES................................. (.5%) $ (22,723,006)
====== ==============
NET ASSETS............................................................. 100.0% $4,566,292,432
====== ==============
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Variable interest rate--subject to periodic change.
(b) Backed by an irrevocable letter of credit.
</FN>
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997
Cost Value
--------------- ---------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments--Note 1(b)......................... $4,589,015,438 $4,589,015,438
Cash............................................. 1,001,524
Interest receivable.............................. 27,091,403
Prepaid expenses................................. 456,181
--------------
4,617,564,546
--------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 2,628,589
Payable for investment securities purchased...... 47,937,500
Accrued expenses................................. 706,025
--------------
51,272,114
--------------
NET ASSETS..................................................................... $4,566,292,432
==============
REPRESENTED BY: Paid-in capital.................................. $4,566,362,813
Accumulated net realized gain (loss) on investments (70,381)
--------------
NET ASSETS..................................................................... $4,566,292,432
==============
SHARES OUTSTANDING
(25 billion shares of $.10 par value Common Stock authorized).................. 4,567,238,181
NET ASSET VALUE, offering and redemption price per share....................... $1.00
=====
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations Year Ended December 31, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $263,957,517
EXPENSES: Management fee--Note 2(a).................. $21,984,365
Shareholder servicing costs--Note 2(b)..... 11,892,036
Prospectus and shareholders' reports....... 335,797
Custodian fees............................. 269,253
Registration fees.......................... 116,863
Directors' fees and expenses--Note 2(c).... 85,960
Professional fees.......................... 64,294
Miscellaneous.............................. 76,939
-----------
Total Expenses........................ 34,825,507
Less--reduction in management fee due to
undertaking--Note 2(a)................... (284,274)
-----------
Net Expenses.......................... 34,541,233
------------
INVESTMENT INCOME--NET................................................... 229,416,284
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b)....................... 1,828,717
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $231,245,001
============
See notes to financial statements.
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
</TABLE>
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------- -----------------
OPERATIONS:
<S> <C> <C>
Investment income--net.................................................. $ 229,416,284 $ 219,245,338
Net realized gain (loss) on investments................................. 1,828,717 281,929
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 231,245,001 219,527,267
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................. (229,416,284) (220,475,485)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................... 18,330,869,555 20,551,870,721
Dividends reinvested.................................................... 228,467,232 219,063,717
Cost of shares redeemed................................................. (18,709,571,848) (20,515,225,668)
--------------- ---------------
Increase (Decrease) in Net Assets from Capital Stock Transactions. (150,235,061) 255,708,770
--------------- ---------------
Total Increase (Decrease) in Net Assets........................ (148,406,344) 254,760,552
NET ASSETS:
Beginning of Period..................................................... 4,714,698,776 4,459,938,224
--------------- ---------------
End of Period........................................................... $ 4,566,292,432 $ 4,714,698,776
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Investment Operations:
Investment income--net............................ .049 .048 .053 .035 .026
----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net............. (.049) (.048) (.053) (.035) (.026)
----- ----- ----- ----- -----
Net asset value, end of period.................... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN.............................. 5.04% 4.91% 5.45% 3.53% 2.64%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... .74% .76% .79% .76% .77%
Ratio of net investment income to average net assets 4.92% 4.76% 5.33% 3.49% 2.62%
Decrease reflected in above expense ratios
due to undertakings by the Manager............. .01% .02% -- -- --
Net Assets, end of period (000's Omitted)......... $4,566,292 $4,714,699 $4,459,938 $4,863,374 $4,828,134
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Liquid Assets, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 ("Act") as a diversified open-end management investment
company. The Fund's investment objective is to provide investors with as high a
level of current income as is consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00; the Fund has adopted certain investment, portfolio valuation and dividend
and distribution policies to enable it to do so. There is no assurance, however,
that the Fund will be able to maintain a stable net asset value per share of
$1.00.
The Fund's statements are prepared in accordance with generally accepted
accounting principles which may require the use of management estimates and
assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at amortized
cost, which has been determined by the Fund's Board of Directors to represent
the fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis. Cost of investments represents amortized cost.
The Fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the Fund's Manager, subject to the seller's
agreement to repurchase and the Fund's agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities falls below the value of the repurchase price plus
accrued interest, the Fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the Fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare and
pay dividends from investment income-net on each business day. Dividends from
net realized capital gain are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, it is the policy of the
Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $70,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1997. If not
applied, the carryover expires 1998.
At December 31, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is based on the value of the Fund's average daily net assets and
is computed at the following annual rates: 1/2 of 1% of the first $1.5 billion;
48/100ths of 1% of the next $500 million; 47/100ths of 1% of the next $500
million; and 45/100ths of 1% over $2.5 billion. The fee is payable monthly.
The Agreement provides that if any full fiscal year the aggregate expenses,
exclusive of taxes, brokerage, interest on borrowings and extraordinary
expenses, exceed 1% of the value of the Fund's average net assets for any full
year, the Manager will refund to the Fund, or bear, the excess over 1%. However,
the Manager had undertaken from January 1, 1997 through December 31, 1997 to
reduce the management fee paid by the Fund, to the extent that the Fund's
aggregate annual expenses (exclusive of certain expenses as described above)
exceed an annual rate of .75 of 1% of the value of the Fund's average daily net
assets. The reduction in management fee, pursuant to the undertaking, amounted
to $284,274 during the period ended December 31, 1997.
(B) Under the Shareholder Services Plan, the Fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the Fund's average daily net assets
for certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the period ended
December 31, 1997, the Fund was charged $5,425,404 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended December 31, 1997, the Fund was charged $4,941,709 pursuant to the
transfer agency agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $6,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
<PAGE>
Dreyfus Liquid Assets, Inc.
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS LIQUID ASSETS, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Liquid Assets, Inc., including the statement of investments, as of
December 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Liquid Assets, Inc. at December 31, 1997, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the indicated
years, in conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
February 4, 1998
<PAGE>
Dreyfus Liquid Assets, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 039AR9712
