If an analyst wants to know how likely it is that a business would be able to pay off all its debts,which of the following statements would be MOST useful?
A) Income statement
B) Balance sheet
C) Statement of owner's equity
D) Statement of cash flows

Question

Quizplus · Accepted Answer

The balance sheet provides information about a business's assets, liabilities, and equity at a specific point in time. This includes information on the amount of debt the business has, as well as its cash and other assets that could be used to pay off that debt. Therefore, it is the most useful statement for determining a business's ability to pay off its debts.

If an Analyst Wants to Know How Likely It Is