What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?
A) Profitability
B) Liquidity
C) Leverage
D) Activity
E) Growth

Question

Quizplus · Accepted Answer

The growth category of ratios measures a firm's ability to maintain its economic position in the growth of the economy and industry. This includes ratios such as earnings per share growth, revenue growth, and return on equity, which can show how well the company is performing compared to the industry average and how well it is growing in relation to the overall economy. Ratios in the profitability, liquidity, leverage, and activity categories do not focus specifically on a firm's ability to maintain its economic position in the growth of the economy and industry.

What Category of Ratios Measures How Effectively a Firm Can