Question

which financial statement would creditors of a bank be interested in?

Answer 1

The creditors of a bank would be interested in the Income statement of a company.

Income statement provides information about whether the borrower has the ability to pay interest on time. EBITDA divided by interest expenses is a key ratio that measures the interest paying ability of the borrower. This ratio gives how many times the company can meet interest expenses with the EBITDA. Higher the ratio the better it is for the creditors.

EBITDA - Earnings Before Interest and Taxes and Depreciation and Amortization