5 Efficiency refers to how productive a company is in using

5) Efficiency refers to how productive a company is in using its assets, and is usually measured relative to how much revenue is generated from a certain level of assets. 5) 6) The greater the times interest earned ratio, the lower the risk a company is exposed to. 6) 7) The use of debt is sometimes described as financial leverage because debt can have the effect of increasing the return on equity. 7) 8) Capital structure refers to a company\'s long-run financial viability and its ability to cover long-term obligations. 8)-- 9) An advantage of common-size statements is that they reflect the dollar magnitude (size) of the different companies under analysis. 9) refers to the availability of resources to meet long-term cash requirements. 10) Liquidity 10)

Solution

Assuming that this is True or false questions

5) False

Efficiency is using lowest amount of input to create more output.

6) True

Greater times interest earned ratio mean company is more capable to pay its debt expense.

7) True

Its is also know as trading on equity.

8) False

It is how a company finances its overall fund requirement and growth by using different sources of funds. Like debt or equity.

9) True

These statement display all item as a percentage of common figure. Therefore allow comparison.

10) False

It is a measure of company to meet immediate or short term cash obligation.