Drawing Paragraph Multiple Choice Which of the following statements is true for financial leverage? .The asset turnover ratio measures financial leverage. .Financial leverage is measured in the proportion of total assets relative to total equity. . The higher the debt to equity ratio, the higher the financial leverage. Financial leverage always increases profitability. Multiple Choice Analysts look for red flags in financial statements that may signal financial trouble. Which of the following is a red flag that suggests that a company may be in trouble? .a decline in days' sales in inventory . a reduction in the debt ratio . a decrease in days' sales in receivables from year to year net cash provided by operating activities is consistently lower than net income