Lottony,Inc.is concerned about its profitability for the current year,since its profit margin has dropped 10% since last year.Which of the following is the least useful comparison in evaluating the drop in Lottony's profit margin?

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to meet its short-term obligations, and is not directly related to its profitability or profit margin. Therefore, a comparison with the current ratio would not provide useful information in evaluating the drop in Lottony's profit margin. Comparisons with the industry average, major competitors, and past profit margins would be more helpful in identifying potential causes for the decrease in profit margin.