A Company That Finances a Relatively Large Portion of Its

question 205

True/False

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

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Definitions:

Economic Responsibility

Refers to the duty of organizations to make decisions that benefit the financial health of both the company and the wider economy.

Strategy

A plan of action designed to achieve a long-term or overall aim, often involving positioning a business for competitive advantage.

Economic Environment

The combination of economic factors that impact the operation and performance of businesses, including inflation, employment rates, economic policy, and market demand.

Competitive Environment

The dynamic external system in which businesses compete against each other for market share and profitability.