To Determine Whether a Company Is Using Leverage Effectively, an Analyst

question 123

Multiple Choice

To determine whether a company is using leverage effectively, an analyst should consider

• A) the current ratio and net working capital.
• B) inventory, accounts receivable and total asset turnover ratios.
• C) the debt to equity and times interest earned ratios.
• D) ROA and the net profit margin.

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Definitions:

Stability

The quality of being resistant to change or variation, often seen as a desirable trait in social, psychological, or economic contexts.

Two-Factor Theory

A psychological theory proposing that employee satisfaction and motivation are influenced by both hygiene factors and motivators, related to job context and content respectively.

Motivator Factors

Elements of a job that can significantly increase employee satisfaction and motivation, such as recognition, responsibility, and achievement.

Theories of Motivation

Various concepts and models that explain what drives individuals to initiate, direct, and sustain behaviors to achieve personal or organizational goals.