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Basic Question 4 of 8
True or False? Profitability means having enough cash available to pay debts when they are due.
User Contributed Comments 8
| User | Comment |
|---|---|
| tomn | Liquidity means the ability to meet short term obligations. Solvency is the ability to meet long term obligations. Profitability: acquiring an excess of capital over expenses. |
| Vikku | Great explanation tomn. |
| bantoo | brilliant analysis tomn! |
| ldfrench | tomm, are you Benjamin Franklin? YOU ARE A GENIUS!!!!!!! |
| lhp112 | Thanks Tomn |
| urzzz | SuperTomn |
| F79KHAN | Thank you Tom that was a great breakdown. Liquidity: Meet Short Term Obligation Solvency: Long Term Profitability: Additional Capital over Expenses <3 |
| alexa821 | people in this study session have much better jokes than in FI and derivatives..I wonder why |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
calculate and interpret activity, liquidity, solvency, and profitability ratios
describe relationships among ratios and evaluate a company using ratio analysis
CFA® 2025 Level I Curriculum, Volume 3, Module 11.