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:

Patent

A legal right granted by a government authority that gives an inventor exclusive rights to use, make, and sell an invention for a certain period of time.

Significant Influence

The capacity of an investor to participate in the financial and operating policy decisions of an investee but not control those policies.

Equity Method

An accounting technique used by firms to assess the profits earned from their investments in other companies by reporting these profits as income.