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Basic Question 4 of 12

Liquidity refers to a firm's short-term ability to generate cash for working capital needs and immediate debt repayment needs. True or False?
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viviann Liquidity refers to a firm's short-term ability to generate cash for working capital needs and immediate debt repayment needs; Solvency refers to a firm's ability to generate a stream of cash flows sufficient to maintain its productive capacity and still meet principal and interest payments on debt in the long run.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

calculate and interpret common-size balance sheets and related financial ratios

CFA® 2025 Level I Curriculum, Volume 2, Module 3.