Which of the Following Statements Is True for Leverage

question 15

Multiple Choice

Which of the following statements is true for leverage?

• A)Assets turnover ratio measures financial leverage.
• B)Leverage always increases profitability.
• C)Leverage is shown in proportion of total assets relative to total equity.
• D)Higher the debt ratio, higher the leverage.

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Definitions:

Excitatory

Pertains to stimuli or substances that increase neuronal activity or facilitate the firing of neurons.

Inhibitory

Pertains to any process or substance that slows down or stops a particular reaction or activity.

Basic Drives

Fundamental biological impulses that drive behavior, such as hunger, thirst, sleep, and reproduction.

Hypothalamus

A region of the brain below the thalamus that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems, and involved in sleep and emotional activity.