Creditors and investors use financial statement analysis to:
A) predict the amount of expected returns and assess the risks associated with those returns
B) evaluate the company's shares
C) evaluate the company's dividend payment record
D) predict the company's price/earnings ratio

Question

Quizplus · Accepted Answer

Creditors and investors use financial statement analysis to predict the amount of expected returns and assess the risks associated with those returns. They analyze the company's financial statements to evaluate its current financial position, profitability, liquidity, and solvency. This helps them to make informed decisions about lending money, investing in the company, or buying or selling its securities. Financial statement analysis is an essential tool for creditors and investors to gauge a company's financial health and performance.

Creditors and Investors Use Financial Statement Analysis To