Investors and creditors look at the balance sheet to see whether the company:

Question

Quizplus · Accepted Answer

Investors and creditors review the balance sheet to evaluate a company's solvency and ability to pay off debts. This is determined by looking at the ratio of assets to liabilities, which will indicate whether the company has enough assets to cover its liabilities. Profitability, cash flow from operations, and dividend payments are all important aspects of a company's financial health, but they are not directly related to the solvency evaluation that creditors and investors make using the balance sheet.

Investors and Creditors Look at the Balance Sheet to See