________ examine the performance of a business and its ability to make economic returns over and above its costs.

Question

Quizplus · Accepted Answer

Profitability ratios measure a company's ability to generate profits relative to its revenue, assets, and equity. These ratios examine the performance of a business and its ability to make economic returns over and above its costs, making them the best choice for the given question. Financial ratios analyze a company's financial health and its ability to meet its financial obligations. Activity ratios measure a company's efficiency in managing its assets. Leverage ratios examine how much debt a company uses to finance its operations.

________ Examine the Performance of a Business and Its Ability