单选题 Passage 3 From the bank’s point of view, leverage ratios vary from conservative (highest calculated leverage) to liberal (lowest calculated leverage) The most conservative leverage rations show the most debt and least net worth, Therefore, the total liabilities/tangible net worth ratio will produce the highest leverage and thus be the most conservative because all liabilities are included. On the net worth side, equity has been reduced by the intangible assets on the balance sheet, Intangible assets do not necessarily yield cash, so it is more conservative to subtract these assets from net worth, Conversely, the senior liabilities/capital funds ratio would show less leverage because only senior liabilities are shown as debt, and net worth bas been augmented by the amounts of subordinated debt outstanding.

单选题 Financial leverage refers to how much money a firm uses for assets.

单选题 Conservative leverage ratio means using the most debt and least net worth in calculating leverage.

单选题 From the bank’s point of view, a liberal leverage calculation is better.