Which one of the following statements related to financial information is not true?

A) Liquidity refers to the company's ability to change the amounts and timing of cash flows to adapt to unexpected needs and opportunities.
B) In general, the higher the risk of an investment, the higher the return on investment expected by investors.
C) Return on capital can be provided only after return of capital.
D) Operating capability describes the company's ability to maintain a given level of operations.

Question

Sameer Qaraeen · Accepted Answer

Final Answer : A, Explanation :  Liquidity actually refers to the ability of a company to meet its short-term obligations using assets that can be easily converted into cash, not the ability to change the amounts and timing of cash flows.

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