Identify the Statement That Is Incorrect

question 68

Multiple Choice

Identify the statement that is incorrect.

• A)Higher financial leverage involves higher risk.
• B)Risk is higher if a company has more liabilities.
• C)Risk is higher if a company has more assets.
• D)The debt ratio is one measure of financial risk.
• E)Lower financial leverage involves lower risk.

---

Definitions:

Operational Planning

The process of planning strategic goals and objectives to tactical goals and objectives. It describes milestones, conditions for success, and explains how, or what portion of, a strategic plan will be put into operation during a given operational period.

Financial Performance

An analysis of a company's ability to generate income from its operations over a certain period of time.

Cash Requirements

The amount of cash a company needs to meet its immediate and short-term obligations or to complete a transaction.

Strategic Planning

Strategic Planning refers to the process organizations use to define their strategy, direction, and make decisions on allocating resources to pursue this strategy, including capital and people.