The ability of a firm to pay its bills on time is called

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Liquidity refers to a company's ability to meet its short-term obligations, including paying bills and other expenses when they come due. This is an important measure of financial health, as a company that consistently struggles to meet its obligations may face serious challenges in the long run. Insolvency refers to the opposite situation, where a company is unable to meet its obligations and may be forced to file for bankruptcy. Capital Adequacy refers to the amount of capital a company has available to cover potential losses, while float refers to the time between when a payment is made and when it is credited to the recipient's account.

The Ability of a Firm to Pay Its Bills on Time