You are a potential creditor and are concerned that a particular company you are ready to lend money to may have too much debt.Which financial statement will provide you with the information you need to evaluate your concern?

Question

Quizplus · Accepted Answer

The balance sheet shows the company's assets, liabilities, and equity at a specific point in time. By reviewing the balance sheet, you can determine the company's debt-to-equity ratio, which is a measure of its financial leverage. If the company has a high amount of debt compared to equity, it may indicate that it is at a high risk of defaulting on its loans, and therefore may not be a good candidate for lending money to.

You Are a Potential Creditor and Are Concerned That a Particular