Liquidity relates to a company's ability to do which of the following?
A)The ability to pay its financial obligations as they become due.
B)The ability to stay in business over the long run.
C)The ability to pay dividends to its stockholders.
D)The ability to collect the amount its customers owe the company.

Question

Quizplus · Accepted Answer

Liquidity refers to a company's ability to pay its financial obligations as they become due. This includes paying off its debts, meeting its short-term expenses, and maintaining a sufficient amount of cash on hand to cover unexpected costs. The other options listed may be important for a company's overall financial health, but they are not directly related to liquidity.

Liquidity Relates to a Company's Ability to Do Which of the Following