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is what the firm owes its creditors?
What a firm owes its creditors is referred to as its liabilities. These liabilities represent legal obligations that the firm must fulfill, typically involving the repayment of borrowed funds or outstanding debts. They can include loans, accounts payable, and other financial commitments. Understanding a firm's liabilities is crucial for assessing its financial health and stability.
Which group of ratios might be most interesting to potential creditors of a firm?
leverage ratios
A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise True or False?
fales
Do bondholders have a priority claim on assets?
Yes, bondholders typically have a priority claim on a company's assets in the event of liquidation or bankruptcy. They are considered creditors and are paid before equity shareholders when the company's assets are distributed. This priority is established in the bond's terms and the legal framework governing secured and unsecured debts. However, the degree of priority can vary depending on whether the bonds are secured (backed by specific assets) or unsecured.
Examples of creditors ledger and a creditors journal?
creditors journal
In the event of a firm's dissolution the firm claim on its assets belong to?
bondholders.
Are bondholders considered creditors in a company's financial structure?
Yes, bondholders are considered creditors in a company's financial structure because they have lent money to the company and expect to be repaid with interest.
When a firm makes annual deposits to repay bondholders at maturity it is using a?
When a firm makes annual deposits to repay bondholders at maturity, it is using a
In the event of a firm's dissolution the first claim on its assets belongs to whom?
bondholders.
Who are the creditors of a corporation?
Bondholders are creditors of a corporation; they have loaned the corporation money and received bonds as evidence of the corporation's. Stockholders, both common and preferred, are owners of a corporation. (STOCKHOLDERS ARE NOT THE CREDITOR)
Who are the main creditors of a corporation?
Bondholders are creditors of a corporation; they have loaned the corporation money and received bonds as evidence of the corporation's. Stockholders, both common and preferred, are owners of a corporation. (STOCKHOLDERS ARE NOT THE CREDITOR)
Why might a bond agreement limit the amount of assets that the firm can lease?
Lease obligation is like debt in that both legally obligate the firm to make a series of specified payments. bondholders would like the firm to limit its lease obligation for the same reason that bondholders desire limit on debt: to keep the firm's financia burden at manageable levels and to make the already existing debt safer.
Who has the first claim to the profits and assets of a firm?
Creditors.
In the event of firm dissolution the first claims on its assets belongs to?
In the event of firm dissolution, the first claims on its assets belong to secured creditors. These are lenders or creditors who hold collateral against their loans, ensuring they are paid first. Following secured creditors, the order of claims typically proceeds to unsecured creditors, and finally, any remaining assets are distributed to the owners or shareholders of the firm.
What happens to shareholders when a company goes bankrupt?
When a company goes bankrupt, shareholders may lose the value of their investment as the company's assets are used to pay off debts to creditors. Shareholders are typically last in line to receive any remaining funds after creditors and bondholders are paid.
The primary concern of creditors when assessing the strength of a firm is the firms?
short-term liquidity
Which group of ratios might be most interesting to potential creditors of a firm?
leverage ratios
