The ability to generate future revenues and meet long-term obligations is referred to as:
A) Liquidity and efficiency.
B) Solvency.
C) Profitability.
D) Market prospects.
E) Creditworthiness.

Question

Quizplus · Accepted Answer

Solvency refers to the ability of a company to generate future revenues and meet long-term obligations. This includes its ability to pay its debts and maintain its financial stability over the long term. Liquidity and efficiency refer to a company's ability to meet its short-term obligations, profitability refers to its ability to generate profit, market prospects refer to its future growth potential, and creditworthiness refers to how likely a company is to be able to repay its debts.

The Ability to Generate Future Revenues and Meet Long-Term Obligations