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20 Cards in this Set
- Front
- Back
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Credit Analysis |
A review of the borrowers creditworthiness. |
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Capacity |
Asks exactly how the borrower intends to repay the loan. |
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Capital |
The money invested by the borrower in the business. |
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Collateral |
Guarantees additional forms of payment provided by the borrower. |
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Conditions |
Focus on the intended purpose of the loan; determine the use of the loan. |
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Character |
The general impression made by the potential borrower. |
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Personal Financial Statement |
Indicates a borrower's net worth. |
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Balance Sheet |
Provides a snapshot of the borrower's business at a specific time. |
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Profit and Loss Statement |
Shows the profit or loss for the year. |
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Statement of Cash Flows |
Outlines the sources of cash in the business. |
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Ratio Analysis |
Allows a review of a company's current financial performance versus that of the previous year. |
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Profit |
The compensation an entrepreneur receives for the assumption of risk in a business venture. |
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Gross Profit Margin |
The most common method of profitability. |
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Liquidity |
A measure of the amount of cash the business has on hand for immediate use. |
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Quick Ratio |
Shows what assets the business can quickly convert to cash. |
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Current Ratio |
A broader indication of liquidity because it includes inventory. |
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Leverage |
Measures the amount of money borrowed versus money owners invested into the company. |
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Debt Ratio |
A comparison of a business's debt versus income. |
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Turnover Ratio |
Shows the amount of time it takes for cash to move through the accounts receivable, inventory account and accounts payable. |
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Collection Period Ratio |
Indicates how quickly a business can collect cash owed by the customers. |
