Which stakeholders must ensure the business can pay its debts and is credit worthy?

Which stakeholders must ensure the business can pay its debts and is credit worthy?

• A. Banks and other financial services
• B. Employees and grande unions
• C. Potential buyer of the business
• D. Financial records

Answer: (A)

The lenders—banks and other financial services—are the ones responsible for ensuring the business can pay its debts and remain creditworthy. They provide the financing and, because their money is at risk, they need confidence that the company can meet interest and principal payments as they come due. They evaluate creditworthiness using financial records, cash flow, and debt-service capacity, and they adjust terms or demand more security if the business’s ability to repay is uncertain. Other groups, like employees or unions, care about wages and working conditions, and a potential buyer cares about value, not the ongoing obligation to fund debt. Financial records are important tools for assessing creditworthiness, but they aren’t stakeholders themselves.

The lenders—banks and other financial services—are the ones responsible for ensuring the business can pay its debts and remain creditworthy. They provide the financing and, because their money is at risk, they need confidence that the company can meet interest and principal payments as they come due. They evaluate creditworthiness using financial records, cash flow, and debt-service capacity, and they adjust terms or demand more security if the business’s ability to repay is uncertain.

Other groups, like employees or unions, care about wages and working conditions, and a potential buyer cares about value, not the ongoing obligation to fund debt. Financial records are important tools for assessing creditworthiness, but they aren’t stakeholders themselves.