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Luseane Pulupaki
on Nov 13, 2024

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Factors that reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency, profitability, and liquidity.

Solvency

The ability of an entity to meet its long-term financial obligations and continue its operations into the foreseeable future.

Liquidity

The ease with which an asset or an investment can be converted into cash without significantly affecting its price.

  • Recognize the importance of liquidity, solvency, and profitability in evaluating a business's performance.
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Rachel WillenborgNov 15, 2024
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