State the nature of accounting information required by long-term lenders.
Accounting information required by the long term lenders are:
- Potential growth of business
- Repaying capacity of the business
- Operational efficiency
Liquidity : Liquidity refers those asset, or security, that can be converted into ready cash without affecting its market price in any time.
as example, Cash is the most liquid of assets.
Potential growth of business : The potential growth of your business reflects the extent to which you believe your business can grow in the future by selling more products.
Repaying capacity of the business : Repayment Capacity refers to the firm's borrowers ability to repay term debt on time.
Profitability : Profitability is a measurement of efficiency – and ultimately its success or failure.