Which of the Following Is Not True About Leverage

question 85

Multiple Choice

Which of the following is not true about leverage?

• A) Operating leverage influences the top half of the income statement, determining EBIT.
• B) Financial leverage deals with the bottom half of the income statement, determining EPS.
• C) Combined leverage utilizes the entire income statement, showing the impact of change in volume on EBIT.
• D) None of the options

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Definitions:

Facilitating Relationships

Facilitating relationships involves creating and maintaining positive connections among business partners, customers, or employees to support organizational objectives.

Marketing Department

A division within a company that focuses on activities and strategies to promote its products or services.

Shareholders

Individuals or entities that own shares in a corporation, thereby having a claim to a portion of its assets and earnings.

Suppliers

Businesses or individuals that provide goods or services to another entity within the supply chain.