When Seeking to Evaluate the Financial Soundness of the Company

question 106

Multiple Choice

When seeking to evaluate the financial soundness of the company prior to purchase,the buyer needs to examine several specific financial elements including:

• A)the company's lease agreement for its facilities.
• B)any current product liability suits.
• C)the current owner's (and relatives')compensation.
• D)the physical plant and existing inventory.

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Definitions:

Credit-Related Information

Information pertaining to an individual's or entity's credit history, including credit scores, payment history, and other data used to assess creditworthiness.

Equal Credit Opportunity Act

A U.S. law that prohibits discrimination in credit transactions based on race, color, religion, national origin, sex, marital status, age, or because a person receives public assistance.

Consumer Credit

A type of personal loan or credit extended to consumers for the purchase of goods and services, repayable in installments or at a later date.

Business Loans

Financial products offered by banks and financial institutions to companies for the purpose of funding operations, expansions, or investments.