A company's ability to earn enough income to attract and hold investment capital ultimately depends on its

Question

Quizplus · Accepted Answer

Profitability refers to a company's ability to generate income in excess of its expenses. This excess, or profit, is what attracts and holds investment capital. Therefore, a company's profitability is crucial to its ability to earn enough income to attract and hold investment capital. Budgeting and planning are important components of financial strategy, but they are not the ultimate determining factors for attracting and holding investment capital. Liquidity, while important for day-to-day operations, does not necessarily translate to long-term profitability or investment potential.

A Company's Ability to Earn Enough Income to Attract and Hold