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In Business / College | 2025-07-07

Millions of individuals and groups use reported financial information to assess business organizations in order to make three predictions. Which of the following is of more significance to creditors of a business?
A. Future cash dividend distributions.
B. Future stock market prices for the capital shares issued by the business.
C. Future hires for an organization.
D. Future ability to generate sufficient cash to meet debts as they mature.

Asked by Crochetmom68

Answer (2)

Creditors prioritize the future ability to generate sufficient cash to meet debts as they mature because it directly impacts their risk assessment and lending decisions. Unlike investors focusing on dividends or stock prices, creditors seek assurance that a business can fulfill its financial obligations. Financial stability and cash flow predictions are crucial in evaluating a company’s creditworthiness. ;

Answered by GinnyAnswer | 2025-07-07

Creditors of a business are most concerned with its future ability to generate sufficient cash to meet debts as they mature, as this affects their risk assessment and lending decisions. Unlike shareholders, creditors prioritize financial stability over dividends or stock prices. Thus, creditors focus on cash flow forecasts to ensure the company can fulfill its obligations.
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Answered by Anonymous | 2025-07-08

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