Question

Resource providers use accounting information to identify companies with high earnings potential because those companies are better able to ______.

Answer 1

Resource providers use accounting information to identify companies with high earnings potential because those companies are better able to make payment for goods or resources they buy and also have the ability to repay debt.

Why is company with high earning potential sought for?

Companies with high earnings potential have the capability to manage their company.

Banks and other agencies look to working with them because they have a viable business tat brings in money from where they can also get their own share if they invest with them.

Therefore,

Resource providers use accounting information to identify companies with high earnings potential because those companies are better able to make payment for goods or resources they buy and also have the ability to repay debt.

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