You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern?

Question

Quizplus · Accepted Answer

The balance sheet is the best financial statement for evaluating a company's debt levels. It provides information on the company's assets, liabilities, and equity, which can be used to calculate the debt-to-equity ratio and assess the company's leverage. The income statement, statement of retained earnings, and statement of cash flows do not provide information on a company's overall debt levels.

You Are a Potential Creditor and Are Concerned That a Particular