In His Presentation to His Banker When He Applies for a Business

question 128

Multiple Choice

In his presentation to his banker when he applies for a business loan to purchase additional equipment, Alan should emphasise:

• A)how much profit the new equipment will generate.
• B)how he will be able to repay the principal of the loan.
• C)how energy-efficient the new equipment is.
• D)how much income he will generate for the bank.

Calculate the acid test ratio.

Compute the ratio of accounts receivable to net sales.

Determine inventory levels and average inventory.

Understand the concept of working capital ratio.

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Definitions:

True-RMS

A measurement of AC voltage or current that accurately reflects the root-mean-square value, providing a true representation of power in a circuit, regardless of waveform shape.

Harmonic Distortion

A deviation from the ideal wave form in signals, generally due to the presence of frequencies that are multiples of the original signal's frequency.

Phase Currents

The electric current flowing through one phase of a multi-phase system.

Neutral Conductor

The conductor in an electrical system that is grounded and carries current only under fault conditions, providing a path for current to return to its source in a balanced system.