Financial risk is not directly associated with ____.
A)ROE
B)EBIT
C)EPS
D)net income

Question

Quizplus · Accepted Answer

Financial risk is primarily associated with the way a company finances its operations, particularly through debt financing, rather than its operational performance. EBIT (Earnings Before Interest and Taxes) reflects a company's operational performance without considering how it is financed (i.e., the impact of debt), making it not directly associated with financial risk. In contrast, ROE (Return on Equity), EPS (Earnings Per Share), and net income can all be affected by the company's financial structure and thus are related to financial risk.

Financial Risk Is Not Directly Associated with ____