Which Ratio Measures the Extent to Which a Firm Relies

question 76

Multiple Choice

Which ratio measures the extent to which a firm relies on debt to meet its financing needs?

• A) asset management ratio
• B) leverage ratio
• C) profitability ratio
• D) liquidity ratio

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Definitions:

Activity-Based Costing

A pricing approach that allocates overheads and indirect expenses to corresponding products and services according to the activities they necessitate.

Activity Rate

A metric used to allocate costs to cost objects based on the activities that drive costs, often used in activity-based costing.

Estimated Costs

Projected or forecasted costs associated with manufacturing, projects, or operations, used for budgeting and planning purposes.

Activity-Based Costing

A costing method that allocates overhead costs to specific products or activities based on their consumption of resources.