Homework answers / question archive / Businesses or companies can fall prey to default if they are not able to keep up their debt obligations

Businesses or companies can fall prey to default if they are not able to keep up their debt obligations

Business

Share With

Businesses or companies can fall prey to default if they are not able to keep up their debt obligations. Defaults will lead to a lower credit rating for the company which in turn reduces its chances of getting credit in the future and may have to pay higher interests on existing debts as well as any new obligations. From an investor's point of view, he would want to invest in a company if it is capable of handling its financial obligations, can grow quickly, and is able to manage the growth scale. A balance sheet is a financial statement of a company that provides a snapshot of what a company owns, owes, and the amount invested by the shareholders. Thus, it is an important tool that helps evaluate the performance of a business. Data that is available includes information from the financial statement of the companies for the previous year (2015). Also, information about the Networth of the company in the following year (2016) is provided which can be used to drive the labeled field. Explanation of data fields available in Data Dictionary, 'Credit Default Data Dictionary.xlsx'