Banking · Credit Appraisal
Considering the fundamental operational differences between trading and manufacturing units, which factor is most crucial for a bank officer to verify when appraising a high-value working capital limit for a trading concern?
- 1The research and development expenditure allocated for the creation of new intellectual property.
- 2The depreciation method used for the factory building and the social security benefits of assembly workers.
- 3The inventory turnover ratio and the shelf-life or risk of obsolescence of the products being traded.✓
- 4The installed capacity of the factory machinery and the power consumption per unit of production.
Correct answer
The inventory turnover ratio and the shelf-life or risk of obsolescence of the products being traded.
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