Provide a Definition of a Divestiture

question 102

Essay

Provide a definition of a divestiture.

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Definitions:

ROE

Return on Equity; a financial ratio indicating the profitability of a company by comparing net income to shareholders' equity.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability excluding interest and income tax expenses.

Total Leverage

The combined effect of using both operating leverage and financial leverage on a company's earnings before interest and taxes (EBIT).

Variable Cost Ratio

The proportion of variable costs to sales or production output, indicating how variable costs change with changes in output.