Which of the following best describes the use of profitability ratios?
A) It shows the relative amount of funds in the business supplied by creditors and shareholders.
B) It indicates a company's ability to pay short-term debts.
C) It indicates management's ability to generate a financial return on sales or investment.
D) It shows the profit margins for the last six months.
E) It indicates 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.

Which of the Following Best Describes the Use of Profitability