Which aspect indicates a business's ability to generate income?

The ability of a business to generate income is primarily indicated by profitability. Profitability refers to the extent to which a business can generate profit from its operations, after all expenses have been deducted from its revenue. It reflects not just the total income (revenue) a business earns but also how effectively it can manage costs and convert that income into profit. High profitability suggests that a business not only generates income but does so efficiently, contributing to its overall financial health and sustainability.

Revenue, while important, simply represents the total income from sales before any expenses are taken into account, and does not necessarily provide insight into how well a business is performing overall. Liquidity refers to a company's ability to meet short-term obligations and convert assets into cash, which is not directly related to income generation. Capital represents the financial resources available for business operations, which, although necessary for growth and income generation, is not a measure of income itself.