As Part of the Measurement of Financial Leverage, the Total

question 14

Multiple Choice

As part of the measurement of financial leverage, the total debt ratio is calculated as:

• A) total liabilities divided by total assets
• B) total liabilities times total assets
• C) current liabilities divided by total assets
• D) total assets minus current liabilities divided by total liabilities divided by total liabilities

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Definitions:

Horizontal Axis

A visualization tool in charts and graphs that typically represents the independent variable.

Straight Line

A geometric figure formed by a set of points in a fixed linear relationship, extending infinitely in both directions.

Variable

In economic and mathematical contexts, a variable is an element, feature, or factor that is liable to vary or change.

Infinite Slope

A mathematical concept where a line or curve on a graph approaches a vertical position, indicating a very steep, immeasurable change.