Asked by HANNAH MARTE on Jul 07, 2024
Verified
An estimate of the company's future financial condition is indispensable to most lending decisions.
Financial Condition
The financial condition of a company refers to its ability to meet its financial obligations, sustain operations, and generate profits, evaluated through its financial statements.
Lending Decisions
Involves assessing the creditworthiness of borrowers and setting terms for loans, critical in banking and finance.
- Recognize the importance of future financial conditions in lending decisions.
Verified Answer
KN
Kendra NewmanJul 13, 2024
Final Answer :
True
Explanation :
An estimate of the company's future financial condition is crucial for making lending decisions as it helps the lender assess the borrower's ability to repay the loan. Without such an estimate, the lender may not be able to assess the risk involved in the lending decision.
Learning Objectives
- Recognize the importance of future financial conditions in lending decisions.
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