For publicly traded firms, which of these ratios measure what investors think of the company's future performance and risk?
A)Liquidity ratios
B)Market value ratios
C)Price value ratios
D)Profitability ratios

Question

Quizplus · Accepted Answer

Market value ratios, such as price-to-earnings ratio and dividend yield, are used to analyze a company's future performance and risk based on the market's perception of the company. These ratios take into account the company's stock price and market capitalization, which are indicators of how well investors think the company is currently performing and its potential for growth or decline in the future. The other ratios, such as liquidity ratios, profitability ratios, and price value ratios, are important metrics for evaluating a company's financial health, but they do not specifically measure investor sentiment towards the company's future performance and risk.

For Publicly Traded Firms, Which of These Ratios Measure What