A commonly used ratio to judge company profitability is
A) The current ratio
B) The debt to equity ratio
C) Times interest earned
D) Return on assets

Question

Quizplus · Accepted Answer

The correct ratio to judge company profitability is the return on assets (ROA), which measures a company's net earnings in relation to its assets. It indicates the company's ability to generate profits from its resources. The other ratios mentioned (current ratio, debt to equity ratio, and times interest earned) are useful for evaluating liquidity, leverage, and debt capacity, respectively, but do not provide a direct measure of profitability.

A Commonly Used Ratio to Judge Company Profitability Is