Which statement best reflects the difference between liquidity and profitability in the context of working capital analysis?

Question $1$Answer

a$.$

Profitability ensures solvency, while liquidity supports creditworthiness

b$.$

Profitability affects tax liability, while liquidity affects shareholder equity

c$.$

Liquidity focuses on meeting short$-$term obligations, while profitability reflects income generation

d$.$

Liquidity is about long$-$term financial strength, while profitability is short$-$term cash availability