Question

25 State whether the following statement is true or false.
'Inventory Turnover Ratio measures the level of financial leverage.

Answer 1

Answer:

False

Explanation:

Inventory turnover ratio measures the efficiency of inventory management

Answer 2

The statement

"Inventory Turnover Ratio measures the level of financial leverage" is a false statement.

Explanation:

Inventory turnover ratio is an important measure in evaluating the efficiency of a company's operations and inventory management.

Inventory turnover is a ratio that measures the number of times inventory is sold or consumed in a given time period.

Below are 5 of the most commonly used leverage ratios:

1)Debt-to-Assets Ratio = Total Debt / Total Assets

2)Debt-to-Assets Ratio = Total Debt / Total Assets2)Debt-to-Equity Ratio = Total Debt / Total Equity

3)Debt-to-Assets Ratio = Total Debt / Total Assets2)Debt-to-Equity Ratio = Total Debt / Total Equity3)Debt-to-Capital Ratio = Today Debt / (Total Debt + Total Equity)

4)Debt-to-Assets Ratio = Total Debt / Total Assets2)Debt-to-Equity Ratio = Total Debt / Total Equity3)Debt-to-Capital Ratio = Today Debt / (Total Debt + Total Equity)4)Debt-to-EBITDA Ratio = Total Debt / Earnings Before Interest Taxes Depreciation & Amortization (EBITDA)

5)Asset-to-Equity Ratio = Total Assets / Total Equity