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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.
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Who gets first claim to assets of a firm's dissolution?
In a firm's dissolution, the first claim to assets typically goes to secured creditors, who have a legal right to specific assets due to collateral agreements. After secured creditors are paid, unsecured creditors, including suppliers and employees, have a claim on the remaining assets. If any assets remain after satisfying all creditors, they may be distributed to shareholders according to their equity stake in the firm.
Which group of ratios might be most interesting to potential creditors of a firm?
leverage ratios
Do bondholders represent creditors of a firm?
Yes, bondholders are indeed considered creditors of a firm. When a company issues bonds, it borrows money from investors, promising to pay back the principal amount along with interest over time. As creditors, bondholders have a legal claim to the company's assets in the event of bankruptcy, ranking above equity holders in the capital structure during liquidation.
A firm's accounts payable ledger may include accounts for creditors who are not suppliers of merchandise True or False?
fales
Why creditors is an liability?
Creditors represent a liability because they are entities to whom a business owes money or obligations. This obligation arises from borrowing funds or purchasing goods and services on credit, which the business is required to repay in the future. As such, creditors create a financial responsibility that must be settled, impacting the company’s balance sheet and overall financial health. Liabilities to creditors decrease the net worth of a business until they are fully satisfied.
Which of these can occur when a person owes more money than he or she can earn or pay to creditors?
Bankruptcy.
Which of these can occur when a person owes more money than he or she earn or pay to creditors?
bankruptcy
Which can occur when a person owes more money than he or she can earn or pay to creditors?
bankruptcy
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.
Who gets first claim to assets of a firm's dissolution?
In a firm's dissolution, the first claim to assets typically goes to secured creditors, who have a legal right to specific assets due to collateral agreements. After secured creditors are paid, unsecured creditors, including suppliers and employees, have a claim on the remaining assets. If any assets remain after satisfying all creditors, they may be distributed to shareholders according to their equity stake in the firm.
What can occur when a person owes more money than he or she can earn or pay to creditors?
A person can lose everything he or she owns when creditors move in to collect what they are owed. A person might have to go through bankruptcy.
What can occur when a person owes more money than he or she earns or pay to creditors?
A person can lose everything he or she owns when creditors move in to collect what they are owed. A person might have to go through bankruptcy.
What can occur when a person owes more money than he or she can earn or pay creditors?
A person can lose everything he or she owns when creditors move in to collect what they are owed. A person might have to go through bankruptcy.
Which automobile company owes its origins to a firm set up by Sanjay Gandhi?
Maruti Udyog
After a person dies can their creditors apply that person life insurance to the debts that person owes?
Only if he touched your mom Hell yeah!
The primary concern of creditors when assessing the strength of a firm is the firms?
short-term liquidity
