A lender using a set of published financial statements would be most interested in:
A) The entity's ability to generate cash from which to pay interest.
B) The entity's ability to generate cash from which to pay dividends.
C) The entity's ability to generate cash from which to pay bonuses.
D) The entity's ability to generate cash from which to pay taxation due on profits.

Question

Quizplus · Accepted Answer

Lenders are primarily concerned with the entity's ability to generate cash to pay interest on borrowed funds, as this directly affects their return on investment and the risk of default.

A Lender Using a Set of Published Financial Statements Would