Discriminant Models Often Ignore Hard-To-Quantify Factors in the Credit Decision

question 117

True/False

Discriminant models often ignore hard-to-quantify factors in the credit decision.

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Definitions:

Average Collection Period

The mean period it takes for an enterprise to collect payments due from its clients.

Financial Statements

Official records that detail a company’s financial activities and condition, including balance sheet, income statement, and cash flow statement.

Stock Market

A marketplace where stocks (shares in corporations) are bought and sold, providing companies with access to capital and investors with a slice of ownership and potential profits.

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets.