Use the table for the question(s)below.
-If the above balance sheet is for a retail company, how has the company's leverage changed between 2017 and 2018?
A)The company has experienced no significant change in its leverage.
B)The company has experienced a significant increase in its leverage.
C)The company has experienced a very significant decrease in its leverage.
D)The company has experienced a significant decrease in its leverage.

Question

Use the table for the question(s)below. 
-If the above balance sheet is for a retail company, how has the company's leverage changed between 2017 and 2018?
A)The company has experienced no significant change in its leverage. 
B)The company has experienced a significant increase in its leverage. 
C)The company has experienced a very significant decrease in its leverage. 
D)The company has experienced a significant decrease in its leverage.

Quizplus · Accepted Answer

A significant increase in leverage means the company is using more debt compared to its equity to finance its assets. Without specific numbers, the correct choice indicates a scenario where the company has increased its debt levels or reduced its equity, increasing its financial leverage.

Use the Table for the Question(s)below