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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

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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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