When Considering Making a Loan to a Company, a Bank

question 46

Multiple Choice

When considering making a loan to a company, a bank will look for:

• A) a high debt ratio and a high current ratio
• B) a low debt ratio and a high current ratio
• C) a low debt ratio and a low current ratio
• D) a high debt ratio and a low current ratio

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Definitions:

Corporate Bylaws

The rules and procedures established by a corporation to govern its operations and management.

Internal Management

The processes, policies, and procedures that govern the day-to-day operations and decision-making within an organization or entity.

Corporate Structure

The organizational design and operational framework of a corporation, defining its departments, roles, authorities, and communication processes.

Nonprofit Corporation

A legal entity organized for a public or social benefit, exempt from paying income tax on the money it earns.