Lenders Use ____ Ratios When Setting Limits on How Much

question 73

Multiple Choice

Lenders use ____ ratios when setting limits on how much a home buyer can borrow.

• A)front-end and back-end
• B)only front-end
• C)assets-to-debt
• D)equity-to-liability

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Definitions:

Financial Plans

Detailed strategies outlining how a business will manage its finances to achieve its objectives, including projections for income, expenses, and investments.

Sales Forecast

An estimate of the amount of goods or services a company expects to sell over a specific period, often used for budgeting and planning.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's overall profitability.

Pro Forma Income Statement

A financial statement that projects the future income and expenses of a company, often used for forecasting or budgeting purposes.