Week 3: Ratio Analysis University of Phoenix ACC/561

Examination of Financial Statements When a financial institution is deciding whether to provide loans or funding to any corporation, it is important to have the most recent and dependable financial information. The auditing of a companys financial statements is essential before the bank proceeds with any loan. The audit is always conducted by an outside auditor who checks and examines that the financial statements are prepared objectively and the true financial position of the corporation is disclosed properly. The audited financial statements enable loan officers to determine the risk involved in providing a loan (Crawford, 2018). Current Ratios and Trends The current ratio measures the solvency of the...