Explain potential and current lenders of long-term funds, Financial Management

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Which ratios would a potential long-term bond investor be most interested in? Explain.

Potential and Current lenders of long-term funds, such as bondholders and banks, are concerned in debt ratios.  When a business's debt ratios raise appreciably, lender and bondholder risk increases because more creditors struggle for that firm's resources if the company runs into financial trouble.

 


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