CIPS L4M4 Question Answer
If a company is described as 'liquid' what does this mean?
the company is funded on equity rather than debt
the company spends a lot of money
the company is highly profitable
the company has enough money to pay short-term liabilities
Explanation
liquid = the ability to pay short and medium term debts. In simple terms do you have more in stuff (money, assets) than you owe in debt?
Understanding Liquidity and How to Measure It (investopedia.com)
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TESTED 18 Dec 2025
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