Correct, both of you. Banks charge lower interest rates on ARMs than on fixed rate, because of the flexibility and the reduction in interest rate risk. Because, we don't know how high the rate could go, although most have a cap don't they. You get a lower interest rate, in exchange for accepting some of the interest rate risk. The risk is that your payments might go up, just like the value of your stock might go down.
Trade creditors are much more concerned with liquidity indicators than profitability.
If you will survive 30 days to pay their bills, that is all that counts. The composition of the current assets is very important, also. That is an excellent example of how a high current ratio does not guarantee high liquidity. I want you to answer. However, if the organization we purchase has low debt, we might be able to use it to borrow long term.