After reviewing the financial statements there are many things that should be considered. Firsts and foremost there are creditors who will be the first ones that will want to look at all of their finances. So they should have made sure that they had everything in order before any decisions are to be made. Debt is way too easy to get into and even harder to get out of. The ability of the company to meet debts as they come due is measured by the current ratio. The conversion of cash and other current assets shows what cash can be made available. The current liabilities are used as the denominator for the ratio to represent the urgent debts, due within one year or the current operating cycle.
All of the information shown is valuable and as important to the creditors as it is to the company itself. The debt ratios are important because they can help to clarify the line between risk and return. There is always some risk because debts have interest charges as well as other fees and principal payments. There is a risk with just about any company and the decisions that they are making that are pertaining to money. Debts are generally paid back off by some companies not all businesses have the tendency to pay their debts and this would be a cause for them to go bankrupt and they usually close down there business within some many months or years.
A successful business will make every effort in paying all of the monies back that they receive from anyone. When presenting any information that will be beneficial to any company one should have reviewed it over carefully, they should also present the idea to another person who would be able to catch any mistakes in the event that they may have made typos to miscalculations. Presentations are important and should be well thought out before showing any ideas to others whom they would be trying to give clarity to. The financial statements provide insight on what the company has been bringing in how much they make and...