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    Financial Ratios- Multiple Choice Question

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    Management's use of resources can best be evaluated by focusing on measures of:
    A. Liquidity
    B. Activity
    C. Leverage
    D. Book Value

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    Answer: B. Activity

    Leverage ratios show how deeply the company is in debt. Overall the leverage or solvency ratios indicate the relative size of the claims of long-term creditors, compared to the claims or property rights of owners. Hence the leverage ratios indicate the method of ...

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    The solution answers and explains a multiple choice question on financial ratios.