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Are Used to Measure the Ability of a Firm to Meet

question 62

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are used to measure the ability of a firm to meet its short term creditor's claims.


Definitions:

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay the loan.

Inadequate

Lacking the quality or quantity required; insufficient for a purpose.

Assets

Economic resources owned or controlled by an individual or entity, expected to produce future benefits.

Default

The failure to fulfill a financial obligation, such as not making the required payments on a loan.

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