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Question
From financial statement analysis the creditors are specially interested to know _______.
Options
Liquidity
Profits
Sale
Share Capital
Solution
From financial statement analysis, the creditors are specially interested to know Liquidity.
Explanation:
The analysis of financial statements helps creditors in assessing the short-term liquidity position of a business. Such analysis helps them in judging the firm’s ability to repay the debts and interest obligations timely. Analysis of financial statements helps creditors in gaining insight about the solvency and profitability of business concerns and, thereby, its liquidity position.
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