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Financial Accounting

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Moderate

Major Goals of a Business

FINACT-C4YNRG

The two major goals of all (for-profit) businesses are profitability and liquidity. Profitability and liquidity can best be described as

A

Profitability is the ability to earn enough income to cover expenses while liquidity is the ability to provide an adequate return to investors.

B

Profitability is the ability to breakeven while liquidity is the ability to attract and maintain investment capital.

C

Profitability is the ability to earn enough income to cover expenses while liquidity is the ability to have enough cash to pay debts when they are due.

D

Profitability is the surplus of revenues over expenses while liquidity is the ability to have enough cash to pay debts when they are due.

E

Profitability is the surplus of revenues over expenses while liquidity is the ability to provide an adequate return to investors.