Question

If the bank you own has no excess reserves and a sound customer comes in asking for a loan, should you automatically turn the customer down, explaining that you don't have any excess reserves to loan out? Why or why not? What options are available for you to provide the funds your customer needs?

Answer 1

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❏The current ratio is balance-sheet financial performance measure of company liquidity. The current ratio indicates a company's ability to meet short-term debt obligations.

❏ The current ratio measures whether or not a firm has enough resources to pay its debts over the next 12 months.

❏A lower debt-to-asset ratio suggests a stronger financial structure, just as a higher debt-to-asset ratio suggests higher risk. Generally, a ratio of 0.4 – 40 percent – or lower is considered a good debt ratio

Answer 2

❏The current ratio is balance-sheet financial performance measure of company liquidity. The current ratio indicates a company's ability to meet short-term debt obligations.

❏ The current ratio measures whether or not a firm has enough resources to pay its debts over the next 12 months.

❏A lower debt-to-asset ratio suggests a stronger financial structure, just as a higher debt-to-asset ratio suggests higher risk. Generally, a ratio of 0.4 – 40 percent – or lower is considered a good debt ratio

$hope \: it \: helps$