Which one of the following is a common analytical tool used by merchandising companies,but not by service companies?
A)Gross profit ratio
B)Earnings per share
C)Current ratio
D)Working capital

Question

Quizplus · Accepted Answer

Gross profit ratio is a common analytical tool used by merchandising companies but not by service companies because service companies do not have inventory, which is necessary to calculate gross profit ratio. Earnings per share, current ratio, and working capital are relevant for both merchandising and service companies.

Which One of the Following Is a Common Analytical Tool