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CREDITORS HIERARCHY

Forums › ACCA Forums › ACCA FM Financial Management Forums › CREDITORS HIERARCHY

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by AvatarJohn Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • December 1, 2022 at 4:39 am #672995
    Avataravishco
    Participant
    • Topics: 17
    • Replies: 44
    • ☆☆

    Hello sir,

    Please correct me if i am wrong, can we say that in company’s point of view from high risk to low risk it can be classified as below:

    1- equity
    2- preference share (equity)
    3- unsecure debts
    4- secure debts

    And in investors point of view it is:
    high risk to low risk
    1- equity
    2- preference share (equity)
    3- unsecure debts
    4- secure debts

    Thanks

    December 1, 2022 at 7:40 am #673004
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54837
    • ☆☆☆☆☆

    What you have written as being from the investors point of view is correct.

    As far as the company is concerned it is not really relevant unless the company is going into liquidation (and then it is legal question relevant to Paper LW rather than relevant for Paper FM).

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Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘CREDITORS HIERARCHY’ is closed to new replies.

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