Leverage Measures

question 5

Multiple Choice

Leverage measures:

• A)Whether the firm can pay its current liabilities
• B)Profit as a portion of equity
• C)Whether the firm can pay its long-term liabilities
• D)The proportion of borrowed funds compared to equity

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Definitions:

Statement of Retained Earnings

A financial document outlining the changes in retained earnings over a specific period, including net income and dividends paid.

Functional Currency

The foremost form of currency in the principal economic zone in which a corporation is active, reported in its financial accounts.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Exchange Rates

The price at which one currency can be exchanged for another, influencing international trade and economics.