Short-term creditors are typically most interested in analyzing a company's
A) marketability
B) profitability
C) operating results
D) solvency

Question

Quizplus · Accepted Answer

Short-term creditors are more concerned with a company's ability to meet its financial obligations in the short-term, which is related to its solvency (i.e. the ability to generate sufficient cash flow to pay debts as they come due). Marketability and profitability may be important factors to consider for long-term investors, but they are typically less relevant to short-term creditors. Operating results may provide some insight into a company's ability to generate cash flow, but solvency is the most direct measure of a company's ability to repay debts.

Short-Term Creditors Are Typically Most Interested in Analyzing a Company's