Munit Exon, an automobile company, sells 100 cars in a year. The net income earned by the company is relatively more than the amount invested by it, thereby giving larger returns to its shareholders. To reach this conclusion, Munit Exon most likely analyzed its _____.
A) profitability ratios
B) liquidity ratios
C) asset management ratios
D) leverage ratios

Question

Quizplus · Accepted Answer

Profitability ratios measure a company's ability to generate income relative to revenue, assets, equity, and other financial metrics, which would indicate larger returns to shareholders.

Munit Exon, an Automobile Company, Sells 100 Cars in a Year