Problemas
Question 8 (1 point) Liquidity refers to your ability to cover any long-term cash deficiencies. True False
Roztwór
Alessandra
élite · Tutor durante 8 años
4.4
(210 Votos)
Respuesta
False
Explicación
## Step 1Liquidity is a term used in finance to describe the ability of an asset to be quickly converted into cash without affecting its market price. This means that a liquid asset can be sold quickly and easily, without causing a significant change in its price.## Step 2The statement in the question is incorrect because it confuses liquidity with solvency. Solvency refers to the ability of a company to meet its long-term financial obligations.## Step 3Liquidity, on the other hand, is about the ability to quickly convert assets into cash to meet short-term obligations. This means that liquidity is about the ability to cover short-term cash deficiencies, not long-term ones.