GK
BUSINESS MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To determine the creditworthiness of people or organizations, businesses apply the:
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four Cs of credit
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80/20 rule
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“keep it simple” policy
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minimum approval rate standard
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Explanation:
Detailed explanation-1: -Standards may differ from lender to lender, but there are four core components-the four C’s-that lender will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.
Detailed explanation-2: -Calculate the Company’s Debt-to-Income Ratio Another way to determine a client’s creditworthiness is to calculate its debt-to-income ratio. This calculation shows you what portion the company’s debts make up its earnings. To determine the ratio, divide the company’s monthly debt payments by gross monthly income.
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