Initiatium, a Software Development Firm, Utilized $2 Million to Create

question 87

Multiple Choice

Initiatium, a software development firm, utilized $2 million to create a new software. Half of the total budget was acquired from loans from different sponsors while the rest was funded by the firm. The debt ratio amounts to 0.5. The given scenario illustrates the analysis of _____.

• A)leverage ratios
• B)asset management ratios
• C)liquidity ratios
• D)profitability ratiosl

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Definitions:

Share Price

The current price at which a share of stock can be bought or sold.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's profits or losses.

Revaluation

The process of adjusting the book value of an asset to reflect its current fair market value.

Journal Entries

Records of financial transactions in the accounting system of a business, ensuring all financial transactions are accounted for.