--%>
Assignment Help - homework help

Ratios which bankers consider to grant a short-term loan

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

E

Expert

Verified

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.

   Related Questions in Financial Management

  • Q : International monetary system how does

    how does adquate liquidity ensures a good international monetary sustem

    		•
  • Q : Calculate the weighted average cost of

    Great Corporation has the following capital situation. Debt: One thousand bonds were issued five years ago at a coupon rate of 11%. They had 20-year terms and $1,000 face values. They are now selling to yield 9%. The tax rate is 37% Preferred stock: Two thousand shares of preferred are outstanding,

    		•
  • Q : Linear or non-linear in

    Explain the term Linear or non-linear in finite-difference methods.

    		•
  • Q : Capital rationing Explain in brief

    Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?

    		•
  • Q : Describe construction of special

    Describe how the special drawing rights (SDR) are constructed. Also, discuss the situation under which the SDR was build.SDR was created by the IMF in the year of 1970 as a new reserve asset, partially to alleviate the pressure on the U.S. dolla

    		•
  • Q : Explain what is a Monte Carlo method

    Explain what is a Monte Carlo method?

    		•
  • Q : Research paper Assignment: The

    Assignment: The objectives/purpose of the research paper project are to enable you to do a comprehensive financial analysis of a publicly traded corporation; and provide you with substantial information for you to make recommendations regarding investing in this corporation. You

    		•
  • Q : SEU (surplus economic unit) and DEU

    What can a financial institution frequently do for a surplus economic unit that it would encompass difficulty doing for itself if the SEU (surplus economic unit) were to deal directly with a DEU (deficit economic unit)?

    		•
  • Q : Decision theory according to decision

    according to decision theory approach ,which is the core of management

    		•
  • Q : Sharpe ratio making sense when Central

    How is Sharpe ratio making sense when Central Limit Theorem is valid?

    		•