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 ratiosl

Question

Quizplus · Accepted Answer

The given scenario illustrates the analysis of leverage ratios, specifically the debt ratio which is calculated by dividing total debt by total assets. In this case, half of the budget was acquired through loans, resulting in a debt ratio of 0.5.

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