Which of the following financial ratios is not a profitability ratio?
A) net profit margin
B) gross profit margin
C) asset turnover
D) ROE
E) ROI

Question

Quizplus · Accepted Answer

Asset turnover is not a profitability ratio, but an efficiency ratio that measures how efficiently a company uses its assets to generate revenues. The other options are all profitability ratios, with net profit margin measuring how much profit a company earns per dollar of revenue, gross profit margin measuring the profit earned on sales after accounting for the cost of goods sold, ROE (return on equity) measuring the amount of profit generated per dollar of shareholder equity, and ROI (return on investment) measuring the return on investment relative to the amount invested.

Which of the Following Financial Ratios Is Not a Profitability