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What is the difference between a profitability ratio and a liquidity ratio? I...

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Accounting

What is the difference between a profitability ratio and a liquidity ratio?

  • I AM SURE

    A profitability ratio shows a firms ability to pay its short-term obligations, whereas a liquidity ratio shows the how well its generating profits.

  • A profitability ratio shows how well a firm is generating profits, whereas a liquidity ratio analyzes how well a company is managing and making use of its assets.

  • A profitability ratio shows how well a company is making use of its assets, whereas a liquidity ratio measures a firms ability to pay its short-term obligations.

  • A profitability ratio shows how well a company is generating profits, whereas a liquidity ratio measures a firms ability to pay its short-term obligations.

  • I DON'T KNOW YET

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