Ratings and Classifications of Borrowers Are Determined by the Borrowers

question 39

Multiple Choice

Ratings and classifications of borrowers are determined by the borrowers'

• A)patterns in profits and costs.
• B)leverage ratios.
• C)past debt redemption.
• D)All of the above are correct.

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Definitions:

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products or services, generating the majority of its revenue and expenses.

Cash Dividends

Cash dividends are payments made by a corporation to its shareholders, usually as a distribution of profits.

Free Cash Flow

A measure of financial performance calculated as operating cash flow minus capital expenditures, representing the cash that a company is able to generate after spending the money required to maintain or expand its asset base.

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment.