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