In Order to Analyze the Collateral of a Company a Credit

question 32

Multiple Choice

in order to analyze the collateral of a company a credit analyst should assess the:

• A) cash flows of the company.
• B) soundness of management's strategy.
• C) value of the company's assets in relation to the level of debt.

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Definitions:

Transfer of Ownership

The process by which the rights of property or title are moved from one party to another.

Void

A term applied to a contract that is not valid because its object is illegal or it has a defect that is so serious that it is not a contract.

Lease

(1) A transfer of the right to possess and use goods for a period of time in return for consideration. (2) The agreement between a landlord and a tenant that specifies the terms of a property rental.

Surrendering Property

The act of voluntarily giving up rights to property, often in a legal or financial context, such as in bankruptcy.