The ratios that are specifically concerned with assessing the returns and performance of shares held for investment purposes are the:
A) investment ratios.
B) efficiency ratios.
C) liquidity ratios.
D) gearing ratios.

Question

Quizplus · Accepted Answer

Investment ratios, also known as profitability ratios, are used to assess the returns and performance of shares held for investment purposes. These ratios include earnings per share, price-earnings ratio, dividend yield, and return on equity. Efficiency ratios assess a company's ability to efficiently use its assets, liquidity ratios measure a company's ability to meet its short-term obligations, and gearing ratios measure a company's leverage and financial risk.

The Ratios That Are Specifically Concerned with Assessing the Returns