A Banker Is Analyzing a Company Which Operates in the Automotive

question 43

Multiple Choice

A banker is analyzing a company which operates in the automotive industry. Which of the following will likely be the banker's most important consideration in determining whether the company should receive a loan?

• A) The automotive plant's capacity.
• B) Inflation has been consistently high for several years.
• C) The company has state-of-the-art automated equipment which enhances the efficiency of its operating process.
• D) The company has a large amount of interest payments related to other outstanding loans.

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Definitions:

Replenish

To fill up or restore to a previous level, often used in the context of inventory or supplies.

Internal Control

A process designed to ensure the safety and efficiency of the financial operations of a company, along with compliance with laws and accuracy in reporting.

Sales Clerks

Employees responsible for assisting customers, processing transactions, and managing products within a retail environment.

Days' Sales Uncollected

Days' Sales Uncollected is a financial metric calculating the average number of days it takes a company to collect payments after a sale has been made.