The term refers to the use of debt to meet a firms

52.
The term _____ refers to the use of debt to meet a firm's funding needs.

53.
Which of the following statements is true of financial leverage?
54.
Which of the following statements best describes a highly leveraged firm?
55.
_____ are ratios that measure the extent to which a firm relies on debt financing in its capita
l structure.
a.
Liquidity ratios
b.
Activity ratios
*c.
Leverage ratios
d.
Profitability ratios
56.
Leverage ratios measure the extent to which a firm uses _____.
57.
Hevron Hrist, a multinational company, finances itself each year by procuring 25 percent of
its yearly budget through loans from banks. The remaining budget is covered by the company itse
lf. The given scenario suggests that the firm most likely relies on measuring _____ to decide its c
apital structure.

*b.
leverage ratios
c.
profitability ratios
d.
liquidity ratios
58.
Ponlinaytion, a clothing company, imports its raw materials from different countries. To cov
er the cost of expensive raw materials, Ponlinaytion takes a yearly loan of $5 million from Herita
ge Rimier, a finance company. The remaining budget is covered by the company itself. The given
scenario indicates that the firm most likely relies on measuring _____ to decide how it finances it
s overall operations and growth by using different sources of funds.