Which of the Following Ratios Measures the Extent to Which

question 49

Multiple Choice

Which of the following ratios measures the extent to which a firm uses debt as a source of financing and its ability to service that debt?

• A) Liquidity ratios
• B) Activity ratios
• C) Leverage ratios
• D) Profitability ratios

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Definitions:

Direct Ownership

A form of business ownership where individuals or entities have complete control over their investments or assets without intermediaries.

Foreign Market

Refers to markets outside the company's home country where it can sell or market its products or services.

Exporting

The process of exporting products or services to a foreign country for the purpose of selling them.

Licensing

An agreement in which a company allows another entity to produce its product in exchange for a predetermined fee.