- This topic has 1 reply, 1 voice, and was last updated Oct-1911:09 am by
.
-
Posts
-
-
Up1
The two primary categories of ratios used for credit analysis are:
- A. leverage and coverage ratios.
- B. operating and financial ratios.
- C. profitability and liquidity ratios.
-
Up1
The correct answer is A.
The two primary categories of ratios used for credit analysis are leverage and coverage ratios.
A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt (loans) or assesses the ability of a company to meet financial obligations.
A coverage ratio is a measure of a company’s ability to meet its financial obligations. In broad terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders.
-
Viewing 1 reply thread
- You must be logged in to reply to this topic.