Give Three Examples of Ways in Which Financial Markets Channel

question 11

Essay

Give three examples of ways in which financial markets channel household savings into investment projects.

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Definitions:

Net Working Capital Turnover

A ratio that measures how effectively a company is using its net working capital to generate sales.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle if longer.

Capital Intensity Ratio

A financial metric that measures the amount of capital needed per dollar of revenue generated, indicating the intensity of the capital used in the business operations.

Times Interest Earned

A financial metric assessing a company's ability to meet its interest obligations from its earnings before interest and taxes.