A Company with a Very High Amount of Liabilities Will

question 53

True/False

A company with a very high amount of liabilities will always find it more difficult to secure loans than a company with a very low amount of liabilities.

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Definitions:

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, which is reinvested in the business.

Annual Revenues

The total amount of money received by a company for goods sold or services provided during a fiscal year.

Net Income

The concluding profit figure for a company, arrived at by deducting every type of expense and tax from its complete revenue.