Nemfembo, a pharmaceutical company, gains most of its net income by outsourcing its manufacturing plants to foreign countries. For every product it manufactures, the demand for those products becomes more pronounced. Which of the following financial ratio analyses can be used to measure how effectively Nemfembo is using its resources to generate revenues?
A) Asset management ratios
B) Capital budgeting ratios
C) Leverage ratios
D) Profitability ratios

Question

Quizplus · Accepted Answer

Asset management ratios measure how effectively a company is using its assets to generate revenues, which is relevant to Nemfembo's situation.

Nemfembo, a Pharmaceutical Company, Gains Most of Its Net Income