An enterprise's ability to take effective actions to alter the amounts and timing of cash flows so it can respond to unexpected needs and opportunities is called
A) financial flexibility.
B) liquidity.
C) the quick ratio.
D) solvency.

Question

Quizplus · Accepted Answer

Financial flexibility refers to an enterprise's ability to adjust its cash flows in response to unexpected needs or opportunities. This includes actions such as increasing or decreasing investments, managing expenses, and altering financing arrangements. Liquidity and the quick ratio refer specifically to an enterprise's current assets and ability to meet short-term obligations, while solvency refers to an enterprise's ability to meet long-term obligations.

An Enterprise's Ability to Take Effective Actions to Alter the Amounts