The mix of debt and equity can primarily affect which financial metric?

The mix of debt and equity primarily affects the return on equity. Return on equity (ROE) is a key financial metric that measures the profitability of a company relative to the shareholders’ equity. By using debt, a company can potentially leverage its operations to generate higher returns on the equity invested by shareholders. Higher levels of debt can increase the potential return on equity, as long as the firm's returns exceed the cost of that debt.

When a company increases its debt, it can fund growth initiatives or operations without diluting ownership by issuing more equity. This leverage can amplify returns, but it can also increase risk, as higher levels of debt require consistent income to service interest payments. Therefore, the structure of a company's capital, which consists of its balance of debt and equity, has a direct impact on how effectively it generates returns for its shareholders.

Meanwhile, customer satisfaction scores, employee turnover rates, and market competition are influenced by a range of operational and strategic factors which are not directly tied to the financial structure in terms of debt and equity. Thus, while these elements may be important for overall business performance, they do not specifically relate to the financial metric of return on equity in the same manner.