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    Long-term creditors

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    Long-term creditors are usually protected to some degree by restrictive covenants, or rules, in loan agreements that restrict the firm's ability to take actions that are not in the best interests of the creditors. Before entering into a loan agreement, creditors very carefully examine the firm's financial condition and pay particular attention to the following ratios.

    Industry averages
    Debt Ratio 0.51 0.4 (Favorable for the ...

    Solution Summary

    Long-term creditors are characterized.