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Determine the creditworthiness of the supplier

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Reference no: EM132712256

You are employed as an accountant for Innovative Computing. Your company is in the process of signing a large contract with an electronics components supplier. You have a friend who works for the electronics components supplier, and you were told the company having trouble paying bills. You ask to review the financial statements of the supplier.

Problem 1. Which financial statements is most helpful to determine the creditworthiness of the supplier? What information from the financial statements should be used to either support or disprove your friend's claims?

Problem 2. What are the four basic financial statements? What is their purpose and what does each one tell you about a company?

Problem 3. How are the four financial statements interrelated? Which line items are used to prepare other statements?

Reference no: EM132712256

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