Igor the Intern Has Obtained the Following Financial Data for PDQ

question 43

Multiple Choice

Igor the intern has obtained the following financial data for PDQ Corporation:

The leverage ratio for 2022 is:

• A)1.6667
• B)1.9655
• C)26.32%
• D)86.21%

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), which represents the profit a company earns from its core operations.

Fixed Costs

Overhead expenses that remain constant regardless of the volume of activity or production levels within a company.

Cost-volume-profit Analysis

An accounting tool used to determine the effects of changes in costs and volume on a company's profits.

Equation Form

A mathematical representation expressed through an equation, often used in describing financial principles or calculations.