Which Ratio Measures a Firm's Leverage

question 12

Multiple Choice

Which ratio measures a firm's leverage?

• A)Debt-to-equity
• B)Current
• C)Return-on-assets
• D)Asset turnover
• E)None of these

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Definitions:

Operating Activities

Transactions and events that pertain to the core business functions of an organization, influencing net income.

Inventory Decrease

A reduction in the quantity of goods held in stock by a company.

Investing Activities

Transactions involving the purchase and sale of long-term assets or investments, part of a company’s cash flow.

Cash Payments

Financial transactions involving the outflow of cash to settle obligations or purchase goods and services.