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Aunt Dottie's Linen Inc. reported no long-term debt in its most recent balance sheet. A company with no debt on its books is referred to as:(a)A company with no leverage, or an unleveraged company(b)A company with leverage, or a leveraged company

User Vidhya Sri
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Answer:

The correct answer is letter "B": A company with leverage, or a leveraged company.

Step-by-step explanation:

Leveraged companies are those that finance their activities on debt to a certain degree resulting in having a positive balance on their books against a promissory note of debt repayment in the long-term. Companies that do not request loans to fund their operations rely on equity financing only.

Companies using too much leverage carry the risk of having more volatile profits the expectations of increasing revenue tend to offset that idea.

User BrownBe
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