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Match Each Ratio That Follows to Its Use (Items)

Question 207

Matching

Match each ratio that follows to its use (Items). Items may be used more than once.

Premises:
price-earnings (P/E) ratio
working capital
return on total assets
ratio of liabilities to stockholders’ equity
quick ratio
return on common stockholders’ equity
current ratio
asset turnover ratio
dividends per share
earnings per share (EPS) on common stock
Responses:
assess the profitability of the assets
assess how effectively assets are used
indicate the ability to pay current liabilities
indicate how much of the company is financed by debt and equity
indicate instant debt-paying ability
assess the profitability of the investment by common stockholders
indicate future earnings prospects
indicate the extent to which earnings are being distributed to common stockholders

Correct Answer:

price-earnings (P/E) ratio
working capital
return on total assets
ratio of liabilities to stockholders’ equity
quick ratio
return on common stockholders’ equity
current ratio
asset turnover ratio
dividends per share
earnings per share (EPS) on common stock
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