When developing a credit scoring report, many variables would be considered. Which of the following best represents the major factors Dun & Bradstreet would examine?
A) The age of the management team, the dollar amount of sales, net profits, and long-term debt.
B) The age of the company, the number of employees, and the level of current assets.
C) The financial statements, satisfactory or slow payment experiences, and negative public records (suits, liens, judgments, and bankruptcies).
D) The company's cash balances, return on equity, and its average tax rates.

Question

Quizplus · Accepted Answer

The financial statements, satisfactory or slow payment experiences, and negative public records (suits, liens, judgments, and bankruptcies) are the major factors Dun & Bradstreet would examine when developing a credit scoring report. Age, dollar amount of sales, net profits, and long-term debt (A) and age of the company, number of employees, and level of current assets (B) may also be considered, but they are not the primary factors. Cash balances, return on equity, and average tax rates (D) may be important for other financial analyses, but they are not the major factors for credit scoring.

When Developing a Credit Scoring Report, Many Variables Would Be