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

Question

Quizplus · Accepted Answer

Solvency refers to the company's ability to generate future revenues and meet long-term obligations. Liquidity and efficiency refer to the ability to meet short-term obligations, profitability refers to the company's ability to generate profits, market refers to the company's position within the market, and creditworthiness refers to the company's ability to obtain credit from lenders. While all of these factors are important, solvency is specifically related to generating future revenues and meeting long-term obligations.

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