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Credit Rating Agencies and Supplier Evaluation Quiz
7 Questions
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Credit Rating Agencies and Supplier Evaluation Quiz

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@ThrilledHeliotrope

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Questions and Answers

Which of the following best describes the role of credit rating agencies in supplier selection?

  • They assess a supplier's profitability and liquidity
  • They provide insights into a company's stability and growth potential
  • They analyze a supplier's management and corporate strategy
  • They evaluate a supplier's creditworthiness based on financial statements (correct)

    • What factors are considered in the business risk assessment conducted by credit rating agencies?

  • Management quality and strategic direction
  • Market position and competitive landscape (correct)
  • Customer concentration and regulatory environment
  • Financial statements and profitability

    • What information is provided by credit rating agencies to assess a supplier's financial stability?

  • Credit score and risk level
  • Gross margin and market position
  • Profitability and liquidity analysis
  • Debt to equity ratio and current ratio (correct)

    • Which factor is given the highest weight in determining a supplier's credit score?

    <p>Payment History</p> Signup and view all the answers

    What does a low credit score for a supplier usually indicate?

    <p>All of the above</p> Signup and view all the answers

    Why is it necessary to consider the 'New Credit' aspect of a supplier's credit score?

    <p>It signifies potential financial overextension</p> Signup and view all the answers

    What does a varied credit mix indicate about a supplier?

    <p>They have diverse credit options</p> Signup and view all the answers

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