Initiatium, a software development firm, utilized $2 million to create a new software. Half of the total budget was acquired from loans from different sponsors while the rest was funded by the firm. The debt ratio amounts to 0.5. The given scenario illustrates the analysis of _____.
A) leverage ratios
B) asset management ratios
C) liquidity ratios
D) profitability ratios

Question

Quizplus · Accepted Answer

The debt ratio is a type of leverage ratio, which measures the proportion of a company's assets that are financed by debt.

Initiatium, a Software Development Firm, Utilized $2 Million to Create