Compare and contrast a liquidity crisis and a credit freeze
What will be an ideal response?
Answer: A liquidity crisis pertains to a severe shortage of liquidity throughout a sector of the economy or the entire economy, during which companies can't get enough cash to meet their operating needs. In a credit freeze, credit has become so scarce that it is virtually unavailable, at any cost, to most potential borrowers. Credit freeze is more severe than the liquidity crisis and liquidity crisis would often lead to a credit freeze.
You might also like to view...
Derrick is focused on helping his followers while using his values system and “heart.” Even in tough times he does not compromise his values. Derrick is applying ______.
A. authentic leader behaviors consistent with the theoretical model B. authentic leader behaviors consistent with the practical approach C. transformational leader behaviors consistent with Bass’s model D. transactional leader behaviors consistent with Burns’s model
The purchase of treasury stock qualifies as a financing activity, but it is not a cash flow
Indicate whether the statement is true or false
How many levels are within the organizational behavior model?
a. Five b. Four c. Three d. Seven
Leverage ratios are important to creditors because these ratios:
a. measure the firm's ability to meet short-term debt. b. measure the firm's ability to meet long-term debt. c. measure the firm's ability to meet short and long-term debt. d. measure the firm's profitability. e. None of the answers are correct.