Ratios which bankers consider to grant a short-term loan

Question

Which ratios the bankers are most interested in while considering whether to grant a short-term business loan?

Answer 1

Bankers and other lenders mainly make use of liquidity ratios to judge whether to extend short-term credit to a firm.  Liquidity ratios define the capability of a firm in meeting its short-term obligations.

These ratios are of quite significance because failure to pay these obligations leads to bankruptcy. The higher is the value of the liquidity ratio, the more capable a firm is in paying its small-term obligations.