Quick Answer: Which Financial Statement Is Most Important To Creditors?

Income statement.

The most important financial statement for the majority of users is likely to be the income statement, since it reveals the ability of a business to generate a profit.27 Oct 2019

What financial statements are important to creditors?

Details such as income, existing debt obligations, expenses, salaries, profit and cash flow all factor into the overall business financial profile. Creditors use financial statements to determine if the business represents a sound credit risk, as well as its ability to repay debt as agreed.25 Jan 2019

What financial statements are creditors interested in?

Analysts, investors, borrowers and other stakeholders are interested to know how creditors evaluate financial statements in general. The first part of this article covers how creditors analyze a company’s asset quality, capital structure, profitability, cash flow and repayment ability, and off balance sheet items.1 Feb 2014

Why is the cash flow statement the most important financial statement?

The statement of cash flows is very important to investors because it shows how much actual cash a company has generated.

What is the most important part of a balance sheet?

The top line, cash, is the single most important item on the balance sheet. Cash is the fuel of a business.22 Mar 2010