A System for Guaranteeing Loans to New and Small Businesses

question 16

Multiple Choice

A system for guaranteeing loans to new and small businesses to finance inventory or accounts receivable is offered by

• A) Small Business Administration Program.
• B) CAPLine Program.
• C) Large Business Administration Program.
• D) SADF Program.
• E) None of the above.

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Definitions:

Return on Assets

A financial ratio that indicates how profitable a company is relative to its total assets by dividing net income by total assets.

Return on Debt

A measure of how much profit a company generates for every dollar of debt, indicating the efficiency of using borrowed funds.

Total Equity

The net value of a company, determined by subtracting total liabilities from total assets.

Degree of Financial Leverage

This metric quantifies the sensitivity of a company's earnings per share to its fluctuations in operating income, based on the structure of its capital.