Damage to a Building by Fire Is an Example of

question 73

Multiple Choice

Damage to a building by fire is an example of

• A) a benign neglect loss.
• B) a direct loss.
• C) a tort-based liability claim.
• D) a depreciated cash value loss.

---

Definitions:

Solvency

The ability of an entity to meet its long-term financial obligations and continue its operations indefinitely.

Leverage

Refers to the use of borrowed funds to finance the acquisition of assets, aiming to increase the returns to equity shareholders.

Return On Assets Ratio

A financial metric measuring how efficiently a company generates profit from its assets, calculated as net income divided by total assets.

Return On Common Shareholders' Equity Ratio

A financial metric that measures the profitability attributable to shareholders by comparing net income to common equity.