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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 |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
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.