This is also considered as the evaluation of the ability of a company to pay its financial obligationsSelect one:a.Credit Policiesb.Credit Standardsc.Credit Termsd.Credit Analysis
Question
This is also considered as the evaluation of the ability of a company to pay its financial obligationsSelect one:a.Credit Policiesb.Credit Standardsc.Credit Termsd.Credit Analysis
Solution
The correct answer is d. Credit Analysis.
Credit Analysis is the process of evaluating an applicant's loan request or a corporation's debt issue in order to determine the likelihood that the borrower will live up to their financial obligations. This is done by studying the borrower's credit history and comparing it to the current economic situation. Credit analysis also includes an assessment of the economic conditions that could affect the borrower's ability to repay its debt.
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