The Key Dimension of Credit Selection Which Analyzes an Applicant's

question 169

Multiple Choice

The key dimension of credit selection which analyzes an applicant's ability to repay the requested credit focused on cash flows available is ________.

• A) collateral
• B) capital
• C) conditions
• D) capacity

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Definitions:

Income Ratios

Financial metrics that compare different aspects of a company's income, such as net income to sales or net income to total assets, to assess financial health.

Partnership Liabilities

Obligations that are the responsibility of a partnership, shared among partners according to their agreement.

Noncash Assets

Assets that are not in the form of cash or easily convertible to cash, such as equipment, real estate, and intellectual property.

Liquidation

The process of closing a business, selling its assets to pay off debt, and distributing any remaining assets to shareholders or owners.