Leverage ratios indicate
A) the relative amount of funds in the business supplied by shareholders.
B) a company's ability to pay its short-term debts.
C) management's ability to generate a financial return on sales or investment.
D) a company's profit margins for the last six months.
E) the future profits the company can expect from its current customer base.
A) the relative amount of funds in the business supplied by shareholders.
There are three categories of financial ratios: liquidity, leverage, and profitability. Leverage ratios show the relative amount of funds in the business supplied by creditors and shareholders.
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