Question: Explain the problems a creditor might have when assessing the creditworthiness of a subsidiary entity. 2. You ascertain that inventories and (to a lesser extent)

Explain the problems a creditor might have when assessing the creditworthiness of a subsidiary entity.

2.You ascertain that inventories and (to a lesser extent) trade receivables have risen significantly when you consider that sales have increased by only 5%. Discuss the questions that you ask and the possible impact of each answer on the ratios.

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