A short-term creditor would be most interested in
A) profitability ratios.
B) asset utilization ratios.
C) liquidity ratios.
D) debt utilization ratios.

Question

Quizplus · Accepted Answer

Short-term creditors are mostly concerned about the ability of the company to repay its short-term debt obligations. Therefore, the most important ratios for them are liquidity ratios (e.g. current ratio or quick ratio), as they indicate the company's ability to meet its current liabilities. Profitability ratios (option A) and asset utilization ratios (option B) are more relevant for long-term investors or business owners, while debt utilization ratios (option D) focus more on the company's overall level of debt and their ability to service it in the long-term.

A Short-Term Creditor Would Be Most Interested in