When a bank examines a borrower's operating efficiency,it is looking at the protection afforded to creditors from the borrower's earnings.

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When a bank examines a borrower's operating efficiency, it is primarily assessing how effectively the borrower utilizes its resources to generate income, not directly the protection afforded to creditors from the borrower's earnings. Protection to creditors is more directly assessed through credit analysis, which includes examining the borrower's ability to repay debt, financial stability, and collateral, among other factors.

When a Bank Examines a Borrower's Operating Efficiency,it Is Looking