FIN2601 ASSIGNMENT 2
2024
With increased debt comes greater risk, as
well as higher potential reward. Therefore,
the greater the financial ___________, the
greater the potential risk and reward. -
ANSWER>>>>>leverage
Financial ________________ is the
magnification of risk and return through the
use of fixed-cost financing, such as debt and
preference share capital. The more fixed
debt a firm uses, the greater will be its
expected risk and return. -
ANSWER>>>>>leverage
Which ratio measures the proportion of total
assets financed by the firms creditors? -
ANSWER>>>>>Debt ratio
Which ratio is: Total liabilities/Total assets -
ANSWER>>>>>Debt ratio
Assets = 300,000 Liabilities = 180,000 What
is owners equity? - ANSWER>>>>>120,000
, FIN2601 ASSIGNMENT 2
2024
Owners Equity = 50,000 Liabilities = 180,000
What is the Total Assets? -
ANSWER>>>>>230,000
What does EBIT stand for? -
ANSWER>>>>>Earnings before Interest and
Tax
What does FLM stand for? -
ANSWER>>>>>Financial Leverage Multiplier
What does ROA stand for? -
ANSWER>>>>>Return on Assets
What does ROE stand for? -
ANSWER>>>>>Return on Equity
When you see the word margin in a ratio,
what is always the denominator? -
ANSWER>>>>>Sales
What ratio is this: Assets/Equity -
ANSWER>>>>>Financial Leverage Multiplier
Sales - CoS = - ANSWER>>>>>Gross profit
Margin
2024
With increased debt comes greater risk, as
well as higher potential reward. Therefore,
the greater the financial ___________, the
greater the potential risk and reward. -
ANSWER>>>>>leverage
Financial ________________ is the
magnification of risk and return through the
use of fixed-cost financing, such as debt and
preference share capital. The more fixed
debt a firm uses, the greater will be its
expected risk and return. -
ANSWER>>>>>leverage
Which ratio measures the proportion of total
assets financed by the firms creditors? -
ANSWER>>>>>Debt ratio
Which ratio is: Total liabilities/Total assets -
ANSWER>>>>>Debt ratio
Assets = 300,000 Liabilities = 180,000 What
is owners equity? - ANSWER>>>>>120,000
, FIN2601 ASSIGNMENT 2
2024
Owners Equity = 50,000 Liabilities = 180,000
What is the Total Assets? -
ANSWER>>>>>230,000
What does EBIT stand for? -
ANSWER>>>>>Earnings before Interest and
Tax
What does FLM stand for? -
ANSWER>>>>>Financial Leverage Multiplier
What does ROA stand for? -
ANSWER>>>>>Return on Assets
What does ROE stand for? -
ANSWER>>>>>Return on Equity
When you see the word margin in a ratio,
what is always the denominator? -
ANSWER>>>>>Sales
What ratio is this: Assets/Equity -
ANSWER>>>>>Financial Leverage Multiplier
Sales - CoS = - ANSWER>>>>>Gross profit
Margin
