Question

The area of interest for a creditor while analysing financial statements will be ______.

Options

• Solvency

• Liquidity

• Profitability

• None of these.

Answer 1

The area of interest for a creditor while analysing financial statements will be liquidity.

Explanation:

Creditors are short-term suppliers who provide goods or services to a company on credit. Therefore, their primary interest lies in checking the company’s liquidity position. This helps them evaluate whether the company has enough short-term cash or quick assets to repay its immediate short-term obligations on time.