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•Character: The commitment to meet credit obligations. Character is measured by a
credit applicant's prior payment period.
• Capacity: The ability to meet credit obligations with current income. Capacity is
evaluated by looking at the income or cash flows on the applicants? income
statement or statement of cash flow
• Capital: The ability to meet credit obligation from existing assets if necessary.
Capital is evaluated by looking at the applicant's net worth
• Collateral: The collateral value depends on the cost of repossessing and on the
possible resale value.
• Conditions. General/ • or industry economic conditions. Conditions external to the customer's business affects the credit granting decision
NatalieR answered the question on June 17, 2022 at 07:22
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