Which of the following is a leverage ratio?

A Debt equity ratio
B Current ratio
C Quick ratio
D Earning power

Correct Answer: Debt equity ratio

Debt equity ratio is a leverage ratio. The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage.
Bissoy MCQ
#Commerce #Accounting

Related Questions

If a company's return on assets (ROA) stays the same from one year to the next but its financial leverage ratio increases, then the most likely cause is :
A an increase in the debt to equity ratio
B a decrease in net income
C an increase in total assets
D an increase in stockholders equity
In levers, leverage is the ratio of
A Load lifted to the effort applied
B Mechanical advantage to the velocity ratio
C Load arm to the effort arm
D Effort arm to the load arm
Which of the following is the expression for operating leverage?
A Contribution/EBIT
B EBT/Contribution
C Contribution/EAT
D Contribution/Quantity
Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?
A Net income approach
B Modigliani and Miller approach
C Net operating income approach
D Traditional approach
Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies?
A Net Income Approach
B Traditional Approach
C Modigliani-Miller Approach
D Net operating Income
Maxwell Company's return on equity was 18% and the financial leverage percentage was 13% (positive). Return on assets was :
A 31%
B 18%
C 13%
D 5%
Leverage
A Severance
B Power
C Entourage
D Mechanical
When a company uses increased fixed cost for production, this is an example of what type of leverage.
A operating leverage
B financial leverage
C variable cost leverage
D combined leverage
A, B and C invested capitals in the ratio of 4 : 6 : 9 At the end of the business term, they received the profit in the ratio of 2 : 3 : 5. Find the ratio of their time for which they contributed their capitals.
A 1 :1 : 9
B 2 : 2 : 9
C 10 : 10 : 9
D 9 : 9: 10
A and B are in the ratio of 5: 4 , B and C in the ratio of 3 : 2. What is the ratio of A : C ?
A 15
B 16
C 17
D None of these

Next steps