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 itself. The given scenario suggests that the firm most likely relies on measuring _____ to decide its capital structure.
A) asset management ratios
B) leverage ratios
C) profitability ratios
D) liquidity ratios

Question

Quizplus · Accepted Answer

Leverage ratios are used to measure the extent to which a company is using borrowed money (debt) to finance its operations, which aligns with the company's reliance on loans for 25% of its budget.

Hevron Hrist, a Multinational Company, Finances Itself Each Year by Procuring