Profitability ratios
A) Show the relative amount of funds in the business supplied by creditors and shareholders.
B) Indicate a company's ability to pay short-term debts.
C) Indicate management's ability to generate a financial return on sales or investment.
D) Show the profit margins for the last six months.
E) Indicate the future profits from the current customer base.

Question

Quizplus · Accepted Answer

There are three categories of financial ratios: liquidity, leverage, and profitability. Profitability ratios indicate management's ability to generate a financial return on sales or investment.

Profitability Ratios