A banker is reviewing the bank's current portfolio of outstanding loans based on the following information on four companies that the bank has loaned money to: Company EF P5,000,000 P12,500,000 P4,300,000 Company Company CD Company GH P2,450,000 AB Earnings before interest and income taxes Interest expense P3,950,000 P9,000,000 P2,675,000 P1,250,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Which of the following has the highest relative likelihood of being defaulted in paying the outstanding loan?

Company AB.
Company EF.
Company CD.
Company GH.
A banker is reviewing the bank's current portfolio of outstanding loans based on the
following information on four companies that the bank has loaned money to:
Company
AB
Company
CD
P5,000,000 P12,500,000
Company
EF
P4,300,000
Company
GH
P2,450,000
Earnings before interest and
income taxes
Interest expense
P3,950,000 P9,000,000
P2,675,000
P1,250,000
Transcribed Image Text:A banker is reviewing the bank's current portfolio of outstanding loans based on the following information on four companies that the bank has loaned money to: Company AB Company CD P5,000,000 P12,500,000 Company EF P4,300,000 Company GH P2,450,000 Earnings before interest and income taxes Interest expense P3,950,000 P9,000,000 P2,675,000 P1,250,000
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