Creditors (long and short term) are more interested in profitability rather than an entity’s ability to repay them? True or False

Creditors whether short terms or long terms are definitely interested in profitability of the company but the major role player ratios are Liquidity and Solvency ratios.

Sometimes companies having high profitability do not mean that there liquidity position is also good and liquidity is the one which will help company to repay the short term creditos. Because of use of accrual basis of accounting companies have ways to improve proftability or even liquidity and solvency as well. To make a correct decision of lending such a company is to have a deep insight into the whole package of financial information available both in Financial statements and other info.

False