Match up the following credit management elements to the underlying reasons for these elements and answer the questions below.

Which of the elements covers cash flow analysis and why? ____________________________________________________________________

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What is an example of good collateral?

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Explain how character can affect a decision to lend money.

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#1 #2 #3 Match Underlying Reason to Element by inserting the corresponding number from Column #1 Element 1. Credit Rating 2. Collateral 3. Character 4. Capital Underlying Reason Willingness to pay Owner contribution Ability to pay Impact of the business cycle on payments Restrictions on the entity Security for payments Quality of likely payments 5. Capacity 6. Covenants 7. Conditions