Introduction to Business Essay Example | Topics and Well Written Essays - 250 words - 7

unveiling to Business - Essay ExampleThis implies that Potzs assets are to a greater extent likely to be converted into interchange beforehand to that of the Wannabees. It is therefore believed that Potz possess lesser risk to the banks and thus suits more to their requirements to pay-off the loan. (Brigham, 1985)The calculations of the acid test ratio have only confirmed our opinion. It can be observed from the calculations above that Wannabee has too more cash entrapped in inventories which takes time to liquidate. (Brigham, 1985) On the other hand Potz, whose acid-test ratio is 5.7 times larger than that of the Wannabees, is more likely to attract the bank due to its ability to liquefy itself. Therefore, it is expected that the Potz is more likely to start the loan due to its capacity to turn its assets into cash, which can be reflected in the calculations of their acid-test ratio.Despite the fact that liquid state plays an important role in the banks decision to grant the l oan but atomic number 53 cannot ignore the impact of the profitability, efficiency and leverage ratios in the process. However, if the best decision is to be based on the ratios given in the exercise then Potz is likely to succeed in the