Questions: The ability to pay its long-term debts as they become due is referred to as of the company. liquidity working capital solvency

The answer is solvency: the ability to pay its long-term debts as they become due is referred to as solvency of the company.

Explanation for each option:

• Liquidity: This refers to a company's ability to meet its short-term obligations using its most liquid assets. It is not related to long-term debt but rather to the ease with which a company can convert assets into cash to pay off short-term liabilities.

• Working capital: This is a measure of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities. It is not directly related to the ability to pay long-term debts.

• Solvency: This is the correct answer. Solvency refers to a company's ability to meet its long-term obligations and continue its operations in the long term. It indicates the financial stability and health of a company over a longer period.