The ability to earn revenues greater than costs describes:
A) leverage ratios.
B) times interest earned ratio.
C) asset management ratio.
D) profitability ratios.
E) quick ratio.

Question

Quizplus · Accepted Answer

Profitability ratios measure a company's ability to generate earnings relative to its revenue, assets, equity, or other financial metrics. They essentially assess the ability of a company to earn more than its costs and expenses, which directly relates to the definition provided in the question.

The Ability to Earn Revenues Greater Than Costs Describes