Which Ratio Does Not Focus on fiNancial Leverage

question 361

Multiple Choice

Which ratio does not focus on financial leverage?

• A) Total debt ratio.
• B) Debt/equity ratio.
• C) Equity multiplier.
• D) Times interest earned.
• E) Cash ratio.

---

Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs of goods sold, such as rent, salaries, and utilities.

Sales Discounts

Price reductions offered by sellers to encourage prompt payment by buyers.

Credit Sales

Sales made by a business where payment is allowed to be deferred until a later date.

Perpetual Inventory System

An inventory management method where updates are made continuously to record sales and purchases instantly.