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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
Wiki User
∙ 13y ago
Wiki User
∙ 13y agoLiquidity is how quickly an item can be converted to cash to pay a debt or make profit. Profitability is generally how much of a profit it will make. So the difference is liquidity deals with the factor of time while profitability deals with money gained or not.
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What is relationship between liquidity profitability and solvency?
If liquidity inceases profitability decreases so there is inverse relationship
How do banks achieve a balance between profitability and liquidity?
fully discription of ii
Is accrual accounting more closely related to a company's goal of profitability or liquidity?
Profitability
Is accrual accounting more closely related to a company’s goal of profitability or liquidity?
Profitability
How are the concept of liquidity and profitability different?
The liquidity means the assest which can easily turned in to cash.. where as profitability is money which u have earned from ur business it is also cash...
What are the four pillars of finance?
Liquidity, Profitability,Stability,Growth
Explain the relationship between liquidity and profitability for a bank?
Profitability is the difference between income and expense. Liquidity is the ability to turn assets in to cash quickly. Vault cash is the most 'liquid' asset. Stocks and bonds are liquid because they can be sold immediately; real estate is 'illiquid' because it may take a long time to sell. Note that 'liquid' does not mean you can sell at a profit, or even at fair market value, just that it can quickly and easily be sold for cash.
The positive difference between revenue and costs?
Profitability
Why is profitability more important than liquidity?
If your company is profitable, you will have the money to be liquid. Only when the money isn't there does liquidity become a factor.
Is profitability more important than liquidity?
If your company is profitable, you will have the money to be liquid. Only when the money isn't there does liquidity become a factor.
What are four major financial ratios?
Liquidity, Profitability, Leverage, and Activity/Efficiency
A short-term creditor would be most interested in?
profitability
