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I would think liquidity ratios, cash flow, days in receivables, and inventory turns might be a part of their interests. Lender will check following - 1. Leverage (TOL/TNW & TD/TNW) - irrespective of the tenor/type of loan 2. Liquidity Ratio 3. Liquidity Ratios ( current Ratio, inventory turnover ratio, debtors & creditors turnover ratio) 4. Net Working capital - to assess working capital requirement 5. ISCR- Interest service coverage ratio to check capacity to repay interest (in case of CCor OD) 5 DSCR - Debt Service coverage ratio to check capacity to repay interest+ capital (in case of term loan)
What else can I help you with?
Who would interested in the profitability ratios of a business?
Investors and shareholders are primarily interested in the profitability ratios of a business, as these metrics help assess the company's financial health and potential for returns on their investments. Additionally, creditors and lenders analyze these ratios to evaluate the business's ability to generate sufficient profits to meet debt obligations. Management may also use profitability ratios to make informed strategic decisions and improve operational efficiency.
What do lenders do?
As their name suggests, lenders lend money to their customers. This money is then paid back with interested added to it.
What ratios are stockholders interested in?
# The current ratio # return on equity # dividend rate # Gross Margin # Net income margin # qurterly and annual growth ratios
Short term financing method?
Basically we have two financial methods,namely shortterm and longterm. Shortterm financing refers to fund short term fund requirements of an org.and vice versa.
Difference between pooling of risk in shortterm and longterm insurance?
terms period
If you divide users of ratios into short term lenders long term lenders and stockholders which ratios would each group be most interested in?
free cashflow
Who would interested in the profitability ratios of a business?
Investors and shareholders are primarily interested in the profitability ratios of a business, as these metrics help assess the company's financial health and potential for returns on their investments. Additionally, creditors and lenders analyze these ratios to evaluate the business's ability to generate sufficient profits to meet debt obligations. Management may also use profitability ratios to make informed strategic decisions and improve operational efficiency.
What ratios are long-term lenders interested in?
Long-term lenders are primarily interested in ratios that assess a borrower's ability to repay debt over time. Key ratios include the debt-to-equity ratio, which indicates the proportion of debt relative to shareholders' equity, and the interest coverage ratio, which measures the ability to meet interest payments with earnings before interest and taxes (EBIT). Additionally, the current ratio and quick ratio provide insights into short-term liquidity, while the debt service coverage ratio evaluates the cash flow available to cover debt obligations. These ratios help lenders assess the overall financial health and risk associated with lending to a borrower.
What do lenders do?
As their name suggests, lenders lend money to their customers. This money is then paid back with interested added to it.
What ratios are stockholders interested in?
# The current ratio # return on equity # dividend rate # Gross Margin # Net income margin # qurterly and annual growth ratios
Short term financing method?
Basically we have two financial methods,namely shortterm and longterm. Shortterm financing refers to fund short term fund requirements of an org.and vice versa.
When you try to remember a series of digits you are using?
Shortterm memory
Difference between pooling of risk in shortterm and longterm insurance?
terms period
Who uses solvency ratios?
Solvency ratios are primarily used by creditors and investors to assess a company's long-term financial stability and ability to meet its debt obligations. Lenders, such as banks and bondholders, analyze these ratios to evaluate the risk of default before extending credit. Additionally, management and financial analysts utilize solvency ratios to make informed decisions about capital structure and financial strategy. Finally, regulatory bodies may also review these ratios to ensure compliance with financial standards.
What is the most likely option an individual might research if saving for a shortterm goal?
KG
Dividing users of ratios into short term lenders long term lenders and stockholders which ratios would each group be most interest in and for what reasons?
1 because short-termlenders liquidityconcern is with the firm'sability to pay short-termobligations as they come due.2 becauseLong-termlenders--leverageratiosare concerned with the relationship of debt to total assets.Long-termlenders--leverageratios will examine profitability to insure that interest payments can be made.3.becauseStockholders--profitabilityratios, with secondary consideration given to debt utilization, liquidity, and other ratios. Since stockholders are the ultimate owners of the firm, they are primarily concerned with profits or the return on their investment.
What is a financial covernant?
A financial covenant is a clause in a loan agreement or bond indenture that requires the borrower to maintain certain financial metrics or ratios, such as debt-to-equity or interest coverage ratios. These covenants are designed to protect lenders by ensuring that the borrower remains financially stable and capable of repaying the loan. If the borrower fails to meet these requirements, it may trigger penalties, including higher interest rates or loan default. Financial covenants help maintain transparency and accountability between borrowers and lenders.
