In order for investors and creditors to decide whether to invest in a company or loan a company funds they should do all of the following except:
A)Analyze financial statements for the company.
B)Focus on corporate governance of the company.
C)Rely on assurances of reliability by the company's leaders.
D)Compute profitability,liquidity,and leverage ratios for the company.

Question

Quizplus · Accepted Answer

Investors and creditors should not solely rely on assurances of reliability by the company's leaders as they may have biases and conflicts of interest. Instead, they should conduct their own independent analysis of the company's financial statements, corporate governance, and computation of ratios to make informed decisions.

In Order for Investors and Creditors to Decide Whether to Invest