What Does a Financial Leverage Index Greater Than One Indicate

question 9

Multiple Choice

What does a financial leverage index greater than one indicate about a firm?

• A)Return on assets exceeds the return on equity.
• B)Return on equity exceeds the return on assets.
• C)The firm is not employing debt successfully.
• D)The firm does not generate enough funds to cover interest payments.

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Definitions:

Organizational Structures

The hierarchical arrangement of lines of authority, communications, rights, and duties of an organization, determining how roles, power, and responsibilities are assigned, and how work flows.

Physical Layout

the arrangement of physical elements in a space, such as furniture in a room or machinery in a factory.

Future Search Conferences

Interactive, participatory gatherings designed to foster open dialogue and strategic planning among stakeholders for future-oriented action.

Organizational Change

The process by which organizations transform their structures, strategies, processes, cultures, or operations to adapt to changes in the environment.