Asked by Kianna Hendricks on Jun 29, 2024
Verified
The ability to generate future revenues and meet long-term obligations is referred to as:
A) Liquidity and efficiency.
B) Solvency.
C) Profitability.
D) Market prospects.
E) Creditworthiness.
Long-term Obligations
Long-term obligations refer to debts or financial commitments that are due to be paid after one year, including bonds, mortgages, and long-term loans.
Solvency
The ability of a company to meet its long-term financial obligations and continue its operations in the long term.
- Acquire knowledge of the methods and tools employed in financial analysis, including but not limited to ratio analysis and both horizontal and vertical analysis.
Verified Answer
HW
Henry WalshJul 05, 2024
Final Answer :
B
Explanation :
The ability to generate future revenues and meet long-term obligations is the definition of solvency. Liquidity and efficiency refer to the ability to meet short-term obligations, profitability refers to the ability to generate profits, market prospects refer to future growth potential, and creditworthiness refers to the ability to borrow money.
Learning Objectives
- Acquire knowledge of the methods and tools employed in financial analysis, including but not limited to ratio analysis and both horizontal and vertical analysis.
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