Liam’s boss asked him to determine if their company is operating with too many borrowed funds. which ratio will liam utilize to help him with his decision?

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25-07-2022
Business

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Liam’s boss asked him to determine if their company is operating with too many borrowed funds. which ratio will liam utilize to help him with his decision?

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ogorwyne ogorwyne · Answer 1 · 2022-07-28T19:30:51+02:00

The ratio that would help Liam to come with this decisions is what is called the leverage ratio.

What is the leverage ratio?

This is the term that is used to refer to the financial measurement that is used to assess the ability of a company to get to its financial needs.

This ratio is used to check if the company is able to meet with its financial obligation or not.

It helps to measure the expenses mix of the company in such a way that they would be able to tell the changes in out put and how it affects the income that was used for operation.