When Developing a Credit Scoring Report, Many Variables Would Be

question 5

Multiple Choice

When developing a credit scoring report, many variables would be considered. Which of the following best represents the major factors Dun & Bradstreet would examine?

• A) The age of the management team, the dollar amount of sales, net profits, and long-term debt.
• B) The age of the company, the number of employees, and the level of current assets.
• C) The financial statements, satisfactory or slow payment experiences, and negative public records (suits, liens, judgments, and bankruptcies).
• D) The company's cash balances, return on equity, and its average tax rates.

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, often used to assess financial health.

Operating Activities

Refers to the day-to-day tasks and transactions related to the central, ongoing functions of an entity, generating the primary revenue stream.

Operating ROA

A financial metric that measures the efficiency of a company's operations by dividing its operating income by its total assets, showing how well it generates income from its assets.

Return on Sales

A financial ratio that measures the efficiency of a company in generating profits from its revenue.