A Firm's Ability to Pay Its Obligations as They Come

question 122

Multiple Choice

A firm's ability to pay its obligations as they come due and to meet any unforeseen needs for cash is called

• A)Current ratio.
• B)Liquidity.
• C)Working capital.
• D)Accounts receivable turnover.

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Definitions:

Revenues

The aggregate income derived from the trade of goods or provision of services, constituting the core business of a corporation.

Simplified Version

An easier or less complex form of something, often used to aid understanding or analysis.

Minimum Probability

The lowest chance or likelihood of an event occurring, often used in statistical analysis and decision-making processes to evaluate risk.

Costs

The expenses incurred in the production of goods or services, including materials, labor, and overhead.