Solved

Explain the Importance of the Difference Between the Value of a Bank's

Question 82

Essay

Explain the importance of the difference between the value of a bank's assets and the value of its liabilities.
If a company is economically viable, the value of what it owns (assets) will exceed the value of what it owes (liabilities). Equity, therefore, will be positive, and the company will be a going concern (will continue operating). If a company is not viable, the value of what it owes will exceed what it owns. Equity, therefore, will be negative, and the company will be economically bankrupt. This does not mean, however, that it will cease operating at that time.

Correct Answer:

verifed

Verified

If a company is economically viable, the...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents