Which of the Following Statements Is True for Leverage

question 104

Multiple Choice

Which of the following statements is true for leverage?

• A)asset turnover ratio measures financial leverage
• B)leverage always increases profitability
• C)leverage is shown in proportion of total assets relative to total equity
• D)the higher the debt to equity ratio,the higher the leverage

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Definitions:

Bailee

A person or entity to whom personal property is delivered for a specified purpose without transfer of ownership.

Transfer Of Possession

The act of moving control or ownership of an asset from one party to another.

Bailee

A Bailee is a person or entity that has temporary possession of someone else's property under a bailment agreement.

Bailor

A bailor is a person or entity that entrusts their property to another (the bailee) under a bailment agreement, where the property is to be returned or otherwise disposed of according to the bailment terms.