How banks evaluate credit risk

Your Bear Co$.$ is a company that makes teddy bears. It applies for a loan from North Bank to expand its business.

Which of the following most accurately explains why the bank requires Your Bear to provide information about the company's assets and debt as well as how much money the owners of the firm themselves have put into the firm?

The bank is trying to assess Your Bear's liquidity risk.

The bank is trying to assess Your Bear's operational risk.

The bank needs to assess Your Bear's capital to evaluate its credit risk.

The bank needs to assess Your Bear's income to evaluate its credit risk.