Evaluation criteria to pull from the balance sheet and income statement should focus on liquidity and financial leverage.

Question

Quizplus · Accepted Answer

Liquidity and financial leverage are important factors to consider when evaluating a company's financial health. The balance sheet provides information on a company's liquidity through measures such as current ratio and quick ratio, while the income statement provides information on financial leverage through measures such as debt-to-equity ratio and interest coverage ratio. By focusing on these criteria, investors and analysts can better understand a company's ability to meet its short-term and long-term financial obligations.

Evaluation Criteria to Pull from the Balance Sheet and Income