Financial Ratios Jan was in a big hurry.She had just been given the assignment of reporting on the financial health of her company to the new divisional vice president.Donna, the new vice president, had asked Jan to work up several calculations to help her gain an understanding of the company's financial shape.Jan was working hard and had a big order to fill, one that could make or break her reputation with Donna.She quickly pulled out her old financial management textbook and turned to the chapter on financial ratios to help her answer the questions that were asked.
-Refer to Financial Ratios (Scenario).Finally, as the hour dragged to midnight, Jan finished calculating the ________ ratio because Donna wanted to know how efficiently and effectively management is using its assets to generate profits.
A)leverage
B)activity
C)profitability
D)equity
E)financial

Question

Quizplus · Accepted Answer

The correct answer is profitability ratio because it measures how efficiently and effectively management is using its assets to generate profits.

Financial Ratios Jan Was in a Big Hurry