Why Would You Put a Negative Sign in Many Financial

question 3

Multiple Choice

Why would you put a negative sign in many financial functions?

• A)Excel requires a negative interest rate.
• B)Excel interprets these calculations as a negative cash flow (money leaving your account).
• C)Excel uses negatives for all financial functions.
• D)Excel doesn't differentiate between income and outflow.

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Definitions:

Debt/Equity Ratio

A fiscal ratio that reflects the comparative amount of equity from shareholders and borrowed funds utilized to support a company's resources.

DFL

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

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all incomes and expenses except interest and income tax expenses.

EPS

Earnings Per Share (EPS) is a company's net profit divided by the number of common shares outstanding, indicating the company's profitability on a per-share basis.