Question

question 10
what does the term liquidity refer to in a business context?
the businesss ability to maintain a consistent profit margin.
the total amount of money owed to the business by its customers.
the ease with which an asset can be converted into cash without losing value.
the long - term debt obligations of the company.

Explanation:

• Option 1: Maintaining profit margin relates to profitability, not liquidity.
• Option 2: Money owed by customers is accounts receivable, not liquidity.
• Option 3: Liquidity in business is about how easily assets can be turned into cash (e.g., cash is highly liquid, real estate is less liquid).
• Option 4: Long - term debt is a liability, not related to liquidity.

Answer:

C. The ease with which an asset can be converted into cash without losing value.