The top managers of Highbrow Bookstores want to indicate to the firm's shareholders how effectively they have managed the company. Perhaps the most meaningful way to do this would be by reporting strong:
A) liquidity ratios.
B) leverage ratios.
C) activity ratios.
D) profitability ratios.

Question

Quizplus · Accepted Answer

Profitability ratios are the most appropriate measure of how effectively a company is being managed in terms of generating profits for its shareholders. Liquidity ratios, leverage ratios, and activity ratios are important metrics, but they do not necessarily reflect management's ability to generate profits.

The Top Managers of Highbrow Bookstores Want to Indicate to the Firm's