Difference Between Profitability and Liquidity
A small business is started with a capitalof 20,000.
During the first accounting period goodsworth Rs. 15,000 are purchased. Out of the total 15,000, Rs.10,000 are paid incash while the remaining amount will bepaid in 15 days.
All the goods are sold on credit for Rs.35,000, receivable in 30 days .