When analyzing the financial statements of a potential debtor,the primary concerns of creditors include
A)interest revenue.
B)dividend revenue.
C)short-term liquidity only.
D)long-term solvency only.
E)short-term liquidity and long-term solvency.

Question

Quizplus · Accepted Answer

Creditors are concerned with both the short-term liquidity of a potential debtor (ability to meet short-term obligations) and their long-term solvency (ability to meet long-term obligations and remain financially stable). Interest and dividend revenue are not primary concerns for creditors when analyzing a potential debtor's financial statements.

When Analyzing the Financial Statements of a Potential Debtor,the Primary