Which Financial Planning Document Should You Use to Measure Your

question 51

Multiple Choice

Which financial planning document should you use to measure your current financial position?

• A) budget
• B) cash budget
• C) balance sheet
• D) income statement
• E) statement of financial ratios

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Definitions:

Financial Leverage

Employing the use of debt to boost the prospective profits of an investment, which in turn escalates the risk of experiencing a loss.

Debt-To-Equity Ratio

The ratio portraying the financial interplay between shareholder equity and debt in the capital structure for assets.

Net New Bonds

The total value of newly issued bonds minus the bonds that have matured or been bought back by the issuer within a specific period.

Operating Cash Flow

Represents the amount of cash generated by a company's regular business operations.