Investigating liquidity is important because
A)If a company cannot pay its bills on time,it will have difficulty obtaining resources needed to continue operating.
B)A company needs the ability to take advantage of opportunities as they arise.
C)Both if a company cannot pay its bills on time, it will have difficulty obtaining resources needed to continue operating and a company needs the ability to take advantage of opportunities as they arise.
D)Neither if a company cannot pay its bills on time, it will have difficulty obtaining resources needed to continue operating nor a company needs the ability to take advantage of opportunities as they arise.

Question

Investigating liquidity is important because
A)If a company cannot pay its bills on time,it will have difficulty obtaining resources needed to continue operating.
B)A company needs the ability to take advantage of opportunities as they arise. 
C)Both if a company cannot pay its bills on time, it will have difficulty obtaining resources needed to continue operating and a company needs the ability to take advantage of opportunities as they arise. 
D)Neither if a company cannot pay its bills on time, it will have difficulty obtaining resources needed to continue operating nor a company needs the ability to take advantage of opportunities as they arise.

Quizplus · Accepted Answer

Liquidity is important for a company because if it cannot pay its bills on time, it may face financial difficulties and may even have to shut down its operations. On the other hand, having enough liquidity also enables a company to seize opportunities such as investing in new projects or acquiring other businesses, which can lead to growth and increased profitability. Both of these reasons make investigating liquidity an important aspect of financial analysis.

Investigating Liquidity Is Important Because