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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 else can I help you with?
What are ratios that name the same amount?
your answer simular ratios
What does it mean if the cross products of two ratios are not equal?
The ratios are not equal.
what ratios can you use to determine whether the relationship is proportional?
look at the ratios and multiply
What two ratios measure factors that affect profitability?
what tw ratios measure factors
What are two equivalent ratios for 2 to 11?
what are two equivlent ratios for 2:11
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 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
What ratios do you think banks are most interested in for young company?
Banks are typically most interested in liquidity ratios, such as the current ratio and quick ratio, to assess a young company's ability to meet short-term obligations. They also focus on leverage ratios, like the debt-to-equity ratio, to evaluate financial stability and risk. Additionally, profitability ratios, such as net profit margin, can provide insights into the company's potential for sustainable growth. Overall, these ratios help banks gauge the financial health and viability of startups seeking funding.
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 origin of melanoma?
It is cancer of the skin and it can come from longterm overexposure to the sun without sunscreen or people can get it from longterm use of tanning beds.
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.
How do you cope with longterm unemployment?
find a job
What longterm ideas are being overthrown?
The cause
What longterm stores energy in humans?
lipids
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.
