Which of the following ratios is a measure of the company's profitability to its market price?
A)Price-earnings ratio
B)Earnings per share
C)Return on total assets
D)Return on common stockholders' equity

Question

Quizplus · Accepted Answer

The price-earnings ratio (P/E ratio) measures the market price of a company's stock relative to its earnings per share (EPS). It is an indicator of how much investors are willing to pay for each dollar of earnings that the company generates, and is therefore a measure of the company's profitability to its market price.

Which of the Following Ratios Is a Measure of the Company's