Profitability ratios, income multipliers, and financial risk ratios can be used to provide a quick assessment of a property's relative value. Which of the following ratios measures the overall income-producing ability of the property?

Question

Quizplus · Accepted Answer

The capitalization rate measures the net operating income (NOI) of the property as a percentage of the property's value. It is a measure of the overall income-producing ability of the property. The equity dividend rate measures the return on equity investment, the debt coverage ratio measures the property's ability to cover its debt payments with its income, and the operating expense ratio measures the efficiency of the property's operations by comparing total operating expenses to effective gross income.

Profitability Ratios, Income Multipliers, and Financial Risk Ratios Can Be