It Is Not True That Current Assets Are Assets That

question 47

Multiple Choice

It is not true that current assets are assets that a company expects to

• A) realize in cash within one year.
• B) sell within one year.
• C) use up within one year.
• D) acquire within one year.

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Definitions:

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income due to changes in its capital structure.

EBIT

Earnings Before Interest and Taxes, a financial measure that calculates a company's profitability based on its operations without the effects of interest and taxes.

Contribution Margin

The selling price per unit minus the variable cost per unit, used to cover fixed costs and to generate profit.

Breakeven

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.