0
Liquidity is all about cash and assets near to cash (assets that can be easily converted to cash with incurring minimum cost), while Solvency is the ability of a business entity to meets its debts and financial obligations as they mature.
In another word, Liquidity is cash on hand and Solvency is ability to pay debts.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What is relationship between liquidity profitability and solvency?
If liquidity inceases profitability decreases so there is inverse relationship
The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as?
solvency and liquidity
What is the difference between liquidity and equity?
Starting from your basic accounting balance sheet, you have 3 categories: Assets, Liabilities, and Equity. Your equity is the difference between your Assets and your liabilities. Liquidity refers to how easy you can convert an asset into cash. Houses would be illiquid and things like stocks are probably more liquid.
Liquidity and yield analysis?
what is the comparison between liquidity & yield analysis ??????
What is weak bank?
one whose liquidity or solvency is or will be impaired unless there is a major improvement in its financial resources, risk profile, strategic business direction, risk management capabilities and/or quality of management.
What is relationship between liquidity profitability and solvency?
If liquidity inceases profitability decreases so there is inverse relationship
What are the practical difficulties will a company experience when applying the solvency and liquidity test?
when there is financial distress in a company there is a need to perform a solvency and liquidity test consumes time and effort and that hinders the need for more capital.
A short-term creditor would be most interested in?
profitability
What is the difference between Solvency and insolvency?
The difference between solvency and insolvency is that the former describes the state of being able to pay one's debts. whereas the latter describes one's state of being unable to pay.
The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as?
solvency and liquidity
What is the the ability of a company to pay its debt called?
The term "liquidity" is commonly used; however, "solvency" is probably a more accurate term.
Last year MBA 1 st sem quction 2005 to 2008?
What ratio would you calculate to assess liquidity and solvency position of a company ?
What is the difference between liquidity and equity?
Starting from your basic accounting balance sheet, you have 3 categories: Assets, Liabilities, and Equity. Your equity is the difference between your Assets and your liabilities. Liquidity refers to how easy you can convert an asset into cash. Houses would be illiquid and things like stocks are probably more liquid.
Liquidity and yield analysis?
what is the comparison between liquidity & yield analysis ??????
What is weak bank?
one whose liquidity or solvency is or will be impaired unless there is a major improvement in its financial resources, risk profile, strategic business direction, risk management capabilities and/or quality of management.
What is the difference between marketability and liquidity?
Marketability refers to the easy in which a security can be bought and sold full stop. However, with Liquidity there is a further condition that trading should not jeopardise "true value" or fundamental of a security. So liquidity is similar to marketability in many respects but is a more strict condition compared to marketability
What is the difference between profitability and liquidity?
liquidity is how quickly an item can be converted to cash, usually to pay short term debts, profitability is how much money an entity has after taking sales revenue - cost of goods sold...so gross margin
