The ability to meet short-term obligations and to efficiently generate revenues is called:
A) Creditworthiness.
B) Solvency.
C) Profitability.
D) Liquidity and efficiency.
E) Market prospects.

Question

Quizplus · Accepted Answer

Liquidity refers to the ability of a company to meet its short-term obligations, while efficiency refers to how well a company can generate revenues from its resources. Therefore, the ability to meet short-term obligations and efficiently generate revenue is referred to as liquidity and efficiency. Choices A, B, C, and E are not accurate descriptions of this concept.

The Ability to Meet Short-Term Obligations and to Efficiently Generate