Which One of the Following Is Least Likely to Be

question 32

Multiple Choice

Which one of the following is least likely to be correct for a firm that repeatedly stretches its payables?

• A) The firm may receive more favorable status from suppliers.
• B) The firm may reduce its explicit short-term interest expense.
• C) The cost of forgone discounts may exceed the cost of bank credit.
• D) The firm may be labeled as a credit risk.

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Definitions:

Financial Statement Analysis

The process of evaluating and interpreting a company's financial statements to understand its financial health.

Common Tools

Generic equipment or instruments used across various jobs or tasks, not specialized for any particular profession or activity.

Comparative Balance Sheet

Financial statements that present the financial position of a company at different points in time for comparison.

Common-Size Percentages

Financial analysis tool that converts income statement and balance sheet figures to percentages of a common base for comparison purposes.