Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Anonymous

how is the assessment ofa companys financial information by a potential stockholder is different from the assessment of a potential creditor?

Discuss how the assessment of a company’s financial information by a potential stockholder would differ from the assessment of a potential creditor

1 Answer

Relevance
  • ?
    Lv 7
    1 month ago
    Favorite Answer

    An investor would be interested in the companies growth potential in terms of earnings and revenue.  They may be interested in the periodic dividend payment.  They would possibly be interested in the PE ratio in comparison to other companies in the sector.  There primary interest would be in the dividends and potential for the stock to appreciate in value.

    A creditor might be interested in the companies tangible asset values and book values.  They would be interested in working capital (current assets minus current liabilities).  They would be very interested in how many times earnings exceeds the interest payments on the loans.  They would be interested in long-term debt to equity ratio's.  They would also be interested in the companies credit rating. Their primary interest would be whether the company could meet its debt obligations.

Still have questions? Get your answers by asking now.