Which of the following ratios is used to analyze stock as an investment?
A) Price/earnings ratio
B) The current ratio
C) Rate of return on net sales
D) Inventory turnover

Question

Quizplus · Accepted Answer

The Price/Earnings ratio (P/E ratio) is a common tool used by investors and analysts to evaluate the valuation of a company's shares. It compares the company's share price to its earnings per share, providing insight into how much investors are willing to pay per dollar of earnings, which is directly related to stock investment analysis.

Which of the Following Ratios Is Used to Analyze Stock