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Julio Miranda
on Nov 07, 2024

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Considering the 5 C's of credit, what does capital signify?

A) The customer's willingness to meet credit obligations.
B) The customer's ability to meet credit obligations out of operating cash flows.
C) The customer's financial reserves.
D) A pledged asset in the case of default.
E) General economic conditions in the customer's line of business.

5 C's of Credit

The five key elements a lender analyzes when determining a borrower's creditworthiness: character, capacity, capital, collateral, and conditions.

Capital

Financial assets or the financial value of assets, such as cash and goods, working to create wealth through investment or production.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating its ability to generate revenue.

  • Familiarize with the 5 C's of credit (Character, Capacity, Capital, Collateral, Conditions) and their significance in credit evaluation.
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Amirah ZilaniNov 10, 2024
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