If You Wish to Evaluate the Financial Leverage of a Firm

question 71

Multiple Choice

If you wish to evaluate the financial leverage of a firm, you could look at the

• A)current ratio.
• B)debt ratio.
• C)inventory turnover.
• D)return on debt.

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Definitions:

Linear Relationship

A type of association where a change in one variable is directly proportional to a change in another variable.

Precipitation

Any form of water, liquid or solid, falling from the atmosphere, such as rain, snow, sleet, or hail.

Malaria

A life-threatening disease caused by parasites that are transmitted to people through the bites of infected female Anopheles mosquitoes.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.