With regards to credit analysis, this refers to the ability to pay bills and often involves an examination of liquidity ratios.
A) Character
B) Capacity
C) Capital
D) Collateral

Question

Quizplus · Accepted Answer

Capacity refers to the borrower's ability to repay the borrowed amount. This is assessed through an analysis of liquidity ratios, such as the current ratio and quick ratio. Character refers to the borrower's past credit history and reputation, capital refers to the amount of equity the borrower has in the project or business, and collateral refers to the assets that are pledged as security for the loan.

With Regards to Credit Analysis, This Refers to the Ability