Select the right answer from the following:

9. Solvency refers to the:

1. short-term ability to fund the company's operating needs.
2. short-term ability to generate cash for immediate debt repayment needs.
3. long-term ability to generate a positive return on assets.
4. long-term ability to generate sufficient cash to satisfy plant capacity needs, fuel growth, and to repay debt when due.
5. company's overall ability to generate a positive return on common equity for investors.

10. Trend statements help the user

1. determine the reason(s) for changes over time in each financial statement line item.
2. spot relationships among financial statement items.
3. spot changes over time in each financial statement line item.
4. identify variations in company financials against industry averages.