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Which of the following is an overall measure of business performance?
A) Interest coverage ratio
B) ROE
C) Debt to equity ratio
D) Revenue
Business Performance
A measure of how effectively a company uses its resources to achieve its objectives and fulfill stakeholder expectations.
Interest Coverage Ratio
A financial metric that measures a company's ability to pay interest on its outstanding debt.
ROE
Return on Equity; a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.
- Understand the link between operating leverage, financial leverage, and the performance of a business.
- Apprehend the effect that leverage has on a corporation's financial breakeven point and its fragility in operational activities.
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Learning Objectives
- Understand the link between operating leverage, financial leverage, and the performance of a business.
- Apprehend the effect that leverage has on a corporation's financial breakeven point and its fragility in operational activities.
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