Asked by Mitchel Rozwadowski on May 20, 2024
Verified
Profitability is the ability to generate future revenues and meet long-term obligations.
Future Revenues
Expected income from sales or services that a company plans to earn in upcoming periods.
Long-term Obligations
Commitments or debts that a company is required to pay over a period longer than one year, encompassing both financial and non-financial liabilities.
- Gain insight into the foundational elements of financial statement analysis, including the evaluation of liquidity, solvency, profitability, and market possibilities.
Verified Answer
CE
Chiyan EllisMay 20, 2024
Final Answer :
False
Explanation :
Profitability refers to a company's ability to generate income relative to its revenue, operating costs, and other expenses over a certain period of time. It is not directly about generating future revenues or meeting long-term obligations, but rather about the efficiency and effectiveness of a company in generating profits from its current operations.
Learning Objectives
- Gain insight into the foundational elements of financial statement analysis, including the evaluation of liquidity, solvency, profitability, and market possibilities.
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